10-K – 2026-05-11 – ea-20260331.htm

Issuance of common stock 3,496   —  ( 119 ) —  —  ( 119 )
Common stock repurchases and excise tax ( 9,995 ) —  ( 465 ) ( 843 ) —  ( 1,308 )
Cash dividends declared ($ 0.76 per common share)
—  —  —  ( 205 ) —  ( 205 )
Balances as of March 31, 2024 266,415   $ 3   $ —   $ 7,582   $ ( 72 ) $ 7,513  
Total comprehensive income (loss) —  —  —  1,121   ( 15 ) 1,106  
Stock-based compensation —  —  642   —  —  642  
Issuance of common stock 3,532   —  ( 156 ) —  —  ( 156 )
Common stock repurchases and excise tax ( 17,632 ) —  ( 486 ) ( 2,034 ) —  ( 2,520 )
Cash dividends declared ($ 0.76 per common share)
—  —  —  ( 199 ) —  ( 199 )
Balances as of March 31, 2025 252,315   $ 3   $ —   $ 6,470   $ ( 87 ) $ 6,386  
Total comprehensive income (loss) —  —  —  887   ( 15 ) 872  
Stock-based compensation —  —  656   —  —  656  
Issuance of common stock 3,671   —  ( 208 ) —  —  ( 208 )
Common stock repurchases and excise tax ( 5,276 ) —  ( 192 ) ( 559 ) —  ( 751 )
Cash dividends declared ($ 0.76 per common share)
—  —  —  ( 191 ) —  ( 191 )
Balances as of March 31, 2026 250,710   $ 3   $ 256   $ 6,607   $ ( 102 ) $ 6,764  

See accompanying Notes to Consolidated Financial Statements.
38

Table of Contents

ELECTRONIC ARTS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended March 31,
(In millions) 2026 2025 2024
OPERATING ACTIVITIES
Net income $ 887   $ 1,121   $ 1,273  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, accretion and impairment 323   356   404  

Stock-based compensation 656   642   584  
Change in assets and liabilities:
Receivables, net 46   ( 115 ) 119  
Other assets ( 85 ) 40   148  
Accounts payable, accrued, and other liabilities 206   190   ( 208 )
Deferred income taxes, net ( 13 ) ( 41 ) 82  
Deferred net revenue (online-enabled games) 533   ( 114 ) ( 87 )
Net cash provided by operating activities 2,553   2,079   2,315  
INVESTING ACTIVITIES
Capital expenditures ( 230 ) ( 221 ) ( 199 )
Proceeds from maturities and sales of short-term investments 129   695   632  
Purchase of short-term and other investments ( 158 ) ( 437 ) ( 640 )
Acquisitions, net of cash acquired ( 17 ) —   —  
Net cash provided by (used in) investing activities ( 276 ) 37   ( 207 )
FINANCING ACTIVITIES

Payment of senior notes ( 400 ) —   —  
Proceeds from issuance of common stock 83   78   77  
Cash dividends paid ( 191 ) ( 199 ) ( 205 )
Cash paid to taxing authorities for shares withheld from employees ( 291 ) ( 234 ) ( 196 )
Common stock repurchases and excise taxes paid ( 769 ) ( 2,508 ) ( 1,300 )

Net cash used in financing activities ( 1,568 ) ( 2,863 ) ( 1,624 )
Effect of foreign exchange on cash and cash equivalents 19   ( 17 ) ( 8 )
Increase (decrease) in cash and cash equivalents 728   ( 764 ) 476  
Beginning cash and cash equivalents 2,136   2,900   2,424  
Ending cash and cash equivalents $ 2,864   $ 2,136   $ 2,900  
Supplemental cash flow information:
Cash paid during the year for income taxes paid, net of refunds received $ 201   $ 404   $ 300  
Cash paid during the year for interest 53   56   56  
Non-cash investing activities:
Change in accrued capital expenditures $ 4   $ —   $ 25  

See accompanying Notes to Consolidated Financial Statements.
39

Table of Contents

ELECTRONIC ARTS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Electronic Arts is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content and services that can be experienced on game consoles, PCs, and mobile devices. We create innovative games and experiences that deliver high-quality interactive entertainment and drive engagement across our global network of hundreds of millions of players. Through our live services offerings, we offer high-quality experiences designed to provide value to players and extend and enhance gameplay. These live services include extra content, subscription offerings and other revenue generated in addition to the sale of our full games. We are focusing on building games and experiences that grow the global online communities around our key franchises; deepening engagement through connecting interactive storytelling to key intellectual property; and harnessing our communities to grow in, around, and beyond our games.

Consolidation
The accompanying Consolidated Financial Statements include the accounts of Electronic Arts Inc. and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.
Fiscal Year
Our fiscal year is reported on a 52- or 53-week period that ends on the Saturday nearest March 31. Our results of operations for the fiscal year ended March 31, 2026 contained 52 weeks and ended on March 28, 2026. Our results of operations for the fiscal years ended March 31, 2025 and 2024, each contained 52 weeks and ended on March 29, 2025 and March 30, 2024, respectively. For simplicity of disclosure, all fiscal periods are referred to as ending on a calendar month end.
Use of Estimates
The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in our Consolidated Financial Statements and the accompanying notes. Such estimates include offering periods for deferred net revenue, sales returns and allowances, provisions for doubtful accounts, accrued liabilities, relative stand-alone selling price for identified performance obligations in our revenue transactions, losses on royalty commitments, estimates regarding the recoverability of prepaid royalties, long-lived assets, discount rates used in the measurement and recognition of lease liabilities, assets acquired and liabilities assumed in business combinations, certain estimates related to the measurement and recognition of costs resulting from our stock-based payment awards, unrecognized tax benefits, deferred income tax assets and associated valuation allowances, as well as estimates used in our goodwill, intangibles and short-term investment impairment tests. These estimates require us to make judgments, involve analysis of historical and future trends, can require extended periods of time to resolve, and are subject to change from period to period. In all cases, actual results could differ materially from our estimates.
Proposed Merger
On September 28, 2025, we entered into a definitive agreement (the “Merger Agreement”) with Oak-Eagle AcquireCo, Inc. (“Parent”) and Oak-Eagle MergerCo, Inc., a wholly owned subsidiary of Parent (“Merger Sub”). Parent and Merger Sub are entities formed by an investor consortium comprised of The Public Investment Fund (“PIF”), private investment funds affiliated with Silver Lake Group, L.L.C. (“Silver Lake”), and private investment funds affiliated with Affinity Partners (“Affinity,” and, together with PIF and Silver Lake, the “Consortium”). Under the terms of the Merger Agreement, each share of our common stock (other than shares held by the Company, Parent or Merger Sub, and shares owned by stockholders who have properly exercised appraisal rights) will convert into the right to receive $ 210 per share in cash, without interest (the “Merger”).
At a special meeting of stockholders held on December 22, 2025, the Company’s stockholders approved the Merger Agreement and the transactions contemplated thereby. The Merger is still subject to other closing conditions, including the receipt of certain regulatory approvals and the absence of legal restraints in specified jurisdictions prohibiting consummation of the Merger. There are a limited number of regulatory reviews outstanding, and the parties are working diligently to complete these remaining reviews.

Parent has obtained equity and debt financing commitments for the purpose of financing the transactions contemplated by the Merger Agreement. PIF, certain private investment funds affiliated with Silver Lake and certain private investment funds affiliated with Affinity have severally committed to capitalize Parent at the closing of the Merger with equity financing for the
40

Table of Contents

transaction. Pursuant to a debt commitment letter, certain financing sources committed to provide Parent with $ 20  billion of debt financing (the “Debt Commitments”) to fund in part, the transactions contemplated by the Merger Agreement. Since entering into the Merger Agreement and the Debt Commitments, Parent has issued secured and unsecured notes and the debt financing sources under the debt commitment letter have syndicated the credit facilities contemplated thereby. The proceeds of the notes were deposited into escrow accounts and will be released to fund the transactions contemplated by the Merger Agreement, subject to the satisfaction or waiver of certain conditions. The credit facilities will close and be funded substantially concurrently with the closing of the Merger. The Merger is not subject to a financing condition.

The Company has made customary representations, warranties and covenants in the Merger Agreement, including covenants to use commercially reasonable efforts to conduct its business in the ordinary course during the period between the date of the Merger Agreement and the closing of the Merger.
The Company is subject to certain restrictions on its ability to solicit alternative acquisition proposals from third parties and engage in discussions with third parties regarding alternative acquisition proposals.
The Merger Agreement contains certain termination provisions, including a termination fee of up to $ 1  billion payable by the Company under specified circumstances. We also expect to incur significant costs, expenses, and fees for professional services and other transaction costs in connection with the Merger.
If the Merger is completed, the Company’s common stock will be delisted from the NASDAQ Stock Market and deregistered under the Securities Exchange Act of 1934.
The foregoing description of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement attached as Exhibit 2.1 to our Current Report on Form 8-K filed on September 29, 2025.
Recently Adopted Accounting Standards
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures . The amendments further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. We adopted ASU 2023-09 prospectively in the fourth quarter of fiscal year 2026 and have provided the required disclosures in Note 10 - Inc ome Taxes .
Recently Issued Accounting Standards
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires additional, disaggregated disclosure about certain income statement line items. This ASU is effective for our annual report for fiscal year 2028 and interim periods thereafter on a retrospective or prospective basis, with early adoption permitted. We are currently evaluating the timing of adoption and impact of this ASU on our disclosures within the Consolidated Financial Statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses for Accounts Receivable and Contract Assets . This amendment introduces a practical expedient for the application of the current expected credit loss (“CECL”) model to current accounts receivable and contract assets. The amendment is effective beginning in the first quarter of fiscal year 2027 on a prospective basis, with early adoption permitted. We do not expect the adoption of this amendment to have a material impact on our Consolidated Financial Statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Improvements to Accounting for Internal-Use Software, which eliminates references to “project stages” and clarifies the criteria for when internal-use software costs should be capitalized. This ASU is effective beginning in the first quarter of fiscal year 2029 on a prospective, modified-prospective, or retrospective basis, with early adoption permitted. We are currently evaluating the timing of adoption and the impact of this ASU on our Consolidated Financial Statements and related disclosures.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815) - Hedge Accounting Improvements , which more closely aligns hedge accounting with the economics of an entity’s risk management activities. The ASU is effective beginning in the first quarter of fiscal year 2028, on a prospective basis, with early adoption permitted. We do not expect the adoption of this ASU to have a material impact on our Consolidated Financial Statements and related disclosures.
41

Table of Contents

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) - Narrow-Scope Improvements , which clarifies current interim disclosure requirements and provides additional required interim disclosure guidance. The ASU is effective beginning in the first quarter of fiscal year 2029, on a retrospective or prospective basis, with early adoption permitted. We are currently evaluating the timing of adoption and impact of this amendment on our disclosures within the Consolidated Financial Statements.

42

Table of Contents

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash, Cash Equivalents, and Short-Term Investments
Cash equivalents consist of highly liquid investments with insignificant interest rate risk and original or remaining maturities of three months or less at the time of purchase.
Short-term investments consist of debt securities with original or remaining maturities of greater than three months at the time of purchase and less than a year, and are accounted for as available-for-sale securities and are recorded at fair value. Cash, cash equivalents and short-term investments are available for use in current operations or other activities such as capital expenditures, business combinations and stock repurchases.
Unrealized gains and losses on our short-term investments are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity, net of tax, until either (1) the security is sold, (2) the security has matured, (3) we determine that the fair value of the security has declined below its adjusted cost basis and the decline is due to an expected credit loss, or (4) we intend to, or more likely than not would be required to, sell a security in an unrealized loss position before the recovery of its amortized cost basis. Realized gains and losses on our short-term investments are calculated based on the specific identification method and are reclassified from accumulated other comprehensive income (loss) to interest and other income (expense), net. Determining whether a decline in fair value is due to an expected credit loss requires management judgment based on the specific facts and circumstances of each security. The ultimate value realized on these securities is subject to market price volatility until they are sold.
Our short-term investments are evaluated for allowances and impairment quarterly. For investments in an unrealized loss position, we consider various factors in determining whether we should recognize an allowance for expected credit losses or an impairment charge, including the credit quality of the issuer, changes to the rating of the security by rating agencies, the extent to which fair value is less than amortized cost, reason for the decline in value and potential recovery period, the financial condition and near-term prospects of the investees, our intent to sell and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value, and any contractual terms impacting the prepayment or settlement process, among other factors. We recognize an allowance for credit losses, up to the amount of unrealized loss when appropriate, and write down the amortized cost basis of the investment if we intend to, or it is more likely than not we will be required to, sell the investment before the recovery of its amortized cost basis. Allowances for credit losses and write-downs are recognized in our Consolidated Statements of Operations, and unrealized losses not related to credit losses are recognized in other comprehensive income (loss). Based on our evaluation, we did not recognize an allowance for credit losses, nor did we recognize any impairments, as of March 31, 2026 and 2025.
Property and Equipment, Net
Property and equipment, net, are stated at cost. Depreciation is calculated using the straight-line method over the following useful lives:

Buildings    20 to 25 years

Computer equipment and software    2 to 6 years

Equipment, furniture and fixtures, and other    3 to 5 years

Leasehold improvements    Lesser of the lease term or the estimated useful lives of the improvements, ranging from 1 to 14 years

We capitalize costs associated with internal-use software development once a project has reached the application development stage. Such capitalized costs include external direct costs utilized in developing or obtaining the software, and payroll and payroll-related expenses for personnel who are directly associated with the development of the software. Capitalization of such costs begins when the preliminary project stage is complete and ceases at the point in which the project is substantially complete and is ready for its intended purpose. Once internal-use software is ready for its intended use, the assets are depreciated on a straight-line basis over each asset’s estimated useful life, which is generally three years . We also capitalize costs associated with the purchase of possessable internal-use software licenses in the period we obtain control of the licenses. The net book value of capitalized costs associated with internal-use software was $ 135 million and $ 105 million as of March 31, 2026 and 2025, respectively.

43

Table of Contents

Acquisition-Related Intangibles and Other Long-Lived Assets
We recognize acquisition-related intangible assets, such as acquired developed and core technology, in connection with business combinations. We amortize the cost of acquisition-related intangible assets that have finite useful lives generally on a straight-line basis over the lesser of their estimated useful lives or the agreement terms, currently from two to seven years. We evaluate acquisition-related intangibles and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset group. This includes assumptions about future prospects for the business that the asset relates to and typically involves computations of the estimated future cash flows to be generated by these businesses. Based on these judgments and assumptions, we determine whether we need to take an impairment charge to reduce the value of the asset stated on our Consolidated Balance Sheets to reflect its estimated fair value. When we consider such assets to be impaired, the amount of impairment we recognize is measured by the amount by which the carrying amount of the asset exceeds its fair value.
Goodwill Impairment
In assessing impairment on our goodwill, we first analyze qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a goodwill impairment test. The qualitative factors we assess include long-term prospects of our performance, share price trends and market capitalization, and Company specific events. If we conclude it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, we do not need to perform an impairment test. If based on that assessment, we believe it is more likely than not that the fair value of the reporting unit is less than its carrying value we will measure goodwill for impairment by applying fair value-based tests at the reporting unit level. Reporting units are determined by the components of operating segments that constitute a business for which (1) discrete financial information is available, (2) segment management regularly reviews the operating results of that component, and (3) whether the component has dissimilar economic characteristics to other components. As of March 31, 2026, we have only one reportable segment, which represents our only operating segment.
Revenue Recognition
We derive revenue principally from sales of our games, and related extra content and services that can be experienced on game consoles, PCs, and mobile devices. Our product and service offerings include, but are not limited to, the following:
• full games with both online and offline functionality (“Games with Services”), which generally includes (1) the initial game delivered digitally or via physical disc at the time of sale and typically provide access to offline core game content (“software license”); (2) updates on a when-and-if-available basis, such as software patches or updates, and/or additional free content to be delivered in the future (“future update rights”); and (3) a hosted connection for online playability (“online hosting”);
• full games with online-only functionality which require an Internet connection to access all gameplay and functionality (“Online-Hosted Service Games”);
• extra content related to Games with Services and Online-Hosted Service Games which provides access to additional in-game content;
• subscriptions, such as EA Play and EA Play Pro, that generally offer access to a selection of full games, in-game content, online services and other benefits typically for a recurring monthly or annual fee; and
• licensing to third parties to distribute and host our games and content.
We evaluate and recognize revenue by:
• identifying the contract(s) with the customer;
• identifying the performance obligations in the contract;
• determining the transaction price;
• allocating the transaction price to performance obligations in the contract; and
• recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., “transfer of control”).
44

Table of Contents

Certain of our full game and/or extra content are sold to resellers with a contingency that the full game and/or extra content cannot be resold prior to a specific date (“Street Date Contingency”). We recognize revenue for transactions that have a Street Date Contingency when the Street Date Contingency is removed and the full game and/or extra content can be resold by the reseller. For digital full game and/or extra content downloads sold to customers, we recognize revenue when the full game and/or extra content is made available for download to the customer.
Online-Enabled Games
Games with Services. Our sales of Games with Services are evaluated to determine whether the software license, future update rights and the online hosting are distinct and separable. Sales of Games with Services are generally determined to have three distinct performance obligations: software license, future update rights, and the online hosting.
Since we do not sell the performance obligations on a stand-alone basis, we consider market conditions and other observable inputs to estimate the stand-alone selling price for each performance obligation. For Games with Services, generally 75 percent of the sales price is allocated to the software license performance obligation and recognized at a point in time when control of the license has been transferred to the customer. The remaining 25 percent is allocated to the future update rights and the online hosting performance obligations and recognized ratably as the service is provided (over the Estimated Offering Period).
Online-Hosted Service Games. Sales of our Online-Hosted Service Games are determined to have one distinct performance obligation: the online hosting service. We recognize revenue from these arrangements ratably as the service is provided (over the Estimated Offering Period).
Extra Content. Revenue received from sales of downloadable content are derived primarily from the sale of virtual currencies and digital in-game content that are designed to extend and enhance players’ game experience. Sales of extra content are accounted for in a manner consistent with the treatment for our Games with Services and Online-Hosted Service Games as discussed above, depending upon whether or not the extra content has offline functionality. That is, if the extra content has offline functionality, then the extra content is accounted for similarly to Games with Services (generally determined to have three distinct performance obligations: software license, future update rights, and the online hosting). If the extra content does not have offline functionality, then the extra content is determined to have one distinct performance obligation: the online-hosted service.
Subscriptions
Sales of our subscriptions are determined to have one performance obligation: the online hosting. We recognize revenue from these arrangements ratably over the subscription term as the performance obligation is satisfied.
Licensing Revenue
We utilize third-party licensees to distribute and host our games and content in accordance with license agreements, for which the licensees typically pay us a fixed minimum guarantee and/or sales-based royalties. These arrangements typically include multiple performance obligations, such as a time-based license of software and future update rights. We recognize as revenue a portion of the minimum guarantee when we transfer control of the license of software (generally upon commercial launch) and the remaining portion ratably over the contractual term in which we provide the licensee with future update rights. Any sales-based royalties are generally recognized as the related sales occur by the licensee.
Significant Judgments around Revenue Arrangements
Identifying performance obligations. Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, (i.e., the customer can benefit from the goods or services either on its own or together with other resources that are readily available), and are distinct in the context of the contract (i.e., it is separately identifiable from other goods or services in the contract). To the extent a contract includes multiple promises, we must apply judgment to determine whether those promises are separate and distinct performance obligations. If these criteria are not met, the promises are accounted for as a combined performance obligation.
45

Table of Contents

Determining the transaction price. The transaction price is determined based on the consideration that we will be entitled to receive in exchange for transferring our goods and services to the customer. Determining the transaction price often requires judgment, based on an assessment of contractual terms and business practices. It further includes review of variable consideration such as discounts, sales returns, price protection, and rebates, which is estimated at the time of the transaction. In addition, the transaction price does not include an estimate of the variable consideration related to sales-based royalties. Sales-based royalties are recognized as the sales occur.
Allocating the transaction price. Allocating the transaction price requires that we determine an estimate of the relative stand-alone selling price for each distinct performance obligation. Determining the relative stand-alone selling price is inherently subjective, especially in situations where we do not sell the performance obligation on a stand-alone basis (which occurs in the majority of our transactions). In those situations, we determine the relative stand-alone selling price based on various observable inputs using all information that is reasonably available. Examples of observable inputs and information include: historical internal pricing data, cost plus margin analysis, pre-release versus post-release costs, and pricing data from competitors to the extent the data is available. The results of our analysis resulted in a specific percentage of the transaction price being allocated to each performance obligation.
Determining the Estimated Offering Period. The offering period is the period in which we offer to provide the future update rights and/or online hosting for the game and related extra content sold. Because the offering period is not an explicitly defined period, we must make an estimate of the offering period for the service-related performance obligations (i.e., future update rights and online hosting). Determining the Estimated Offering Period is inherently subjective and is subject to regular revision. Generally, we consider the average period of time customers are online when estimating the offering period. We also consider the estimated period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the customer (i.e., time in channel). Based on these two factors, we then consider the method of distribution. For example, games and extra content sold at retail would have a composite offering period equal to the online gameplay period plus time in channel as opposed to digitally-distributed games and extra content which are delivered immediately via digital download and therefore, the offering period is estimated to be only the online gameplay period.
Additionally, we consider results from prior analyses, known and expected online gameplay trends, as well as disclosed service periods for competitors’ games in determining the Estimated Offering Period for future sales. We believe this provides a reasonable depiction of the transfer of future update rights and online hosting to our customers, as it is the best representation of the time period during which our games and extra content are experienced. We recognize revenue for future update rights and online hosting performance obligations ratably on a straight-line basis over this period as there is a consistent pattern of delivery for these performance obligations. Revenue for service-related performance obligations for digitally-distributed games and extra content is recognized over an estimated eight-month period beginning in the month of sale, and revenue for service-related performance obligations for games and extra content sold through retail is recognized over an estimated ten-month period beginning in the month of sale. Prior to July 1, 2025, revenue for service-related performance obligations for our mobile free-to-play games was recognized generally over an eight-month period, and for our PC and console free-to-play games was recognized generally over a twelve-month period, in each case beginning in the month of sale.
During the three months ended September 30, 2025, we completed our annual evaluation of the Estimated Offering Period, and as a result, for sales beginning July 1, 2025, the revenue that we recognize for the service-related performance obligation related to our mobile free-to-play and PC and console free-to-play games is recognized generally over an eleven-month period beginning in the month of sale. This change in Estimated Offering Period did not impact the amount of net bookings or the operating cash flows that we report. During the fiscal year ended March 31, 2026, this change to our Estimated Offering Period resulted in an estimated net decrease in net revenue of $ 74  million and net income of $ 56  million, and a decrease of $ 0.22 diluted earnings per share.
Principal Agent Considerations
We evaluate sales to end customers of our full games and related content via third-party storefronts, including digital storefronts such as Microsoft’s Xbox Store, Sony’s PlayStation Store, Apple App Store, and Google Play Store, in order to determine whether or not we are acting as the principal in the sale to the end customer, which we consider in determining if revenue should be reported gross or net of fees retained by the third-party storefront. An entity is the principal if it controls a good or service before it is transferred to the end customer. Key indicators that we evaluate in determining gross versus net treatment include but are not limited to the following:
46

Table of Contents

• the underlying contract terms and conditions between the various parties to the transaction;
• which party is primarily responsible for fulfilling the promise to provide the specified good or service to the end customer;
• which party has discretion in establishing the price for the specified good or service; and
• which party has title risk before the specified good or service has been transferred to the end customer.
Based on an evaluation of the above indicators, except as discussed below, we have determined that generally the third party is considered the principal to end customers for the sale of our full games and related content. We therefore report revenue related to these arrangements net of the fees retained by the storefront. However, for sales arrangements via Apple App Store and Google Play Store, EA is considered the principal to the end customer and thus, we report revenue on a gross basis and mobile platform fees are reported within cost of revenue.
Payment Terms
Substantially all of our transactions have payment terms, whether customary or on an extended basis, of less than one year; therefore, we generally do not adjust the transaction price for the effects of any potential financing components that may exist.

Sales and Value-Added Taxes

Revenue is recorded net of taxes assessed by governmental authorities that are imposed at the time of the specific revenue-producing transaction between us and our customer, such as sales and value-added taxes.

Sales Returns and Price Protection Reserves

Sales returns and price protection are considered variable consideration. We reduce revenue for estimated future returns and price protection which may occur with our distributors and retailers (“channel partners”). Price protection represents our practice to provide our channel partners with a credit allowance to lower their wholesale price on a particular game unit that they have not resold to customers. The amount of the price protection for permanent markdowns is the difference between the old wholesale price and the new reduced wholesale price. Credits are also given for short-term promotions that temporarily reduce the wholesale price. In certain countries we also have a practice for allowing channel partners to return older products in the channel in exchange for a credit allowance.

When evaluating the adequacy of sales returns and price protection reserves, we analyze the following: historical credit allowances, current sell-through of our channel partners’ inventory of our products, current trends in retail and the video game industry, changes in customer demand, acceptance of our products, and other related factors. In addition, we monitor the volume of sales to our channel partners and their inventories, as substantial overstocking in the distribution channel could result in high returns or higher price protection in subsequent periods.

Taxes Collected from Customers and Remitted to Governmental Authorities
Taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our customers are presented on a net basis in our Consolidated Statements of Operations.
Concentration of Credit Risk and Significant Customers
We extend credit to various customers. Collection of trade receivables may be affected by changes in economic or other industry conditions and may, accordingly, impact our overall credit risk. Although we generally do not require collateral, we perform ongoing credit evaluations of our customers and maintain reserves for potential credit losses. Invoices are aged based on contractual terms with our customers. The provision for doubtful accounts is recorded as a charge to general and administrative expense when a potential loss is identified. Losses are written off against the allowance when the receivable is determined to be uncollectible. At March 31, 2026, we had two customers who accounted for approximately 30 percent and 28 percent of our consolidated gross receivables, respectively. At March 31, 2025, we had two customers who accounted for approximately 35 percent and 28 percent of our consolidated gross receivables, respectively.
A majority of our sales are made via digital resellers, channel and platform partners. During the fiscal years 2026, 2025, and 2024, approximately 86 percent, 88 percent, and 80 percent, respectively, of our net revenue was derived from our top ten customers and/or platform partners.
47

Table of Contents

Currently, a majority of our revenue is derived through sales of products and services playable on hardware consoles from Sony and Microsoft. For the fiscal years ended March 31, 2026, 2025, and 2024, our net revenue for products and services on Sony’s PlayStation 4 and 5, and Microsoft’s Xbox One and Series X consoles (combined across all four platforms) was approximately 60 percent, 62 percent, and 59 percent, respectively. These platform partners have significant influence over the products and services that we offer on their platforms.
Short-term investments are placed with high quality financial institutions or in short-duration, investment-grade securities. We limit the amount of credit exposure in any one financial institution or type of investment instrument.
Royalties and Licenses
Royalty-based obligations with content licensors and distribution affiliates are either paid in advance and capitalized as prepaid royalties or are accrued as incurred and subsequently paid. For contracts with guaranteed minimums, these royalty-based obligations are generally expensed to cost of revenue at the greater of the contractual rate or an effective royalty rate based on the total projected net revenue. Prepayments made to thinly capitalized independent software developers and co-publishing affiliates are generally made in connection with the development of a particular product, and therefore, we are subject to development risk prior to the release of the product. Accordingly, payments that are due prior to completion of a product are generally expensed to research and development over the development period as the services are incurred. Payments due after completion of the product (primarily royalty-based in nature) are generally expensed as cost of revenue.
Our contracts with some licensors include minimum guaranteed royalty payments, which are initially recorded as an asset and as a liability at the contractual amount when no performance remains with the licensor. When performance remains with the licensor, we record guarantee payments as an asset when actually paid and as a liability when incurred, rather than recording the asset and liability upon execution of the contract.
Each quarter, we also evaluate the expected future realization of our royalty-based assets, as well as any unrecognized minimum commitments not yet paid to determine amounts we deem unlikely to be realized through future revenue. Any impairments or losses determined before the launch of a product are generally charged to research and development expense. Impairments or losses determined post-launch are charged to cost of revenue. We evaluate long-lived royalty-based assets for impairment using undiscounted cash flows when impairment indicators exist. If an impairment exists, then the related assets are written down to fair value. Unrecognized minimum royalty-based commitments are recognized when the underlying intellectual property is abandoned (i.e., the date EA commits to cease use of the IP) or the contractual rights to use the intellectual property are terminated.
Advertising Costs
We generally expense advertising costs as incurred, except for production costs associated with media campaigns, which are recognized as prepaid assets (to the extent paid in advance) and expensed at the first run of the advertisement. We are reimbursed by our vendors for certain advertising costs incurred by us that benefit our vendors. Such amounts are recognized as a reduction of marketing and sales expense if the advertising (1) is specific to the vendor, (2) represents an identifiable benefit to us, and (3) represents an incremental cost to us. For the fiscal years ended March 31, 2026, 2025, and 2024, advertising expense, net of vendor reimbursements, totaled approximately $ 354 million, $ 289 million, and $ 375 million, respectively.
Software Development Costs
Research and development costs, which consist primarily of software development costs, are expensed as incurred. We are required to capitalize software development costs incurred for computer software to be sold, leased or otherwise marketed after technological feasibility of the software is established or for development costs that have alternative future uses. Under our current practice of developing games, the technological feasibility of the underlying software is not established until substantially all product development and testing is complete, which generally includes the development of a working model. Software development costs that have been capitalized to date have been insignificant.
Foreign Currency Translation
Generally, the functional currency for our foreign operating subsidiaries is its local currency. Assets and liabilities of foreign operations are translated into U.S. dollars using month-end exchange rates, and revenue and expenses are translated into U.S. dollars using average exchange rates. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity.
48

Table of Contents

Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Net gains (losses) on foreign currency transactions of $ 13 million, $( 29 ) million, and $( 10 ) million for the fiscal years ended March 31, 2026, 2025, and 2024, respectively, are included in interest and other income (expense), net, in our Consolidated Statements of Operations. These net gains (losses) on foreign currency transactions are partially or fully offset by net gains (losses) on our foreign currency forward contracts of $( 10 ) million, $ 45 million, and $ 12 million for the fiscal years ended March 31, 2026, 2025, and 2024, respectively. See Note 5 for additional information on our foreign currency forward contracts.
Income Taxes
We recognize deferred tax assets and liabilities for both the expected impact of differences between the financial statement amount and the tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax losses and tax credit carryforwards. We do not recognize any deferred taxes related to the U.S. taxes on foreign earnings as we recognize these taxes as a period cost.
Every quarter, we perform a realizability analysis to evaluate whether it is more likely than not that all or a portion of our deferred tax assets will not be realized. Our Swiss deferred tax asset realizability analysis relies upon future Swiss taxable income, and considers all available sources of Swiss income based on positive and negative evidence. We give more weight to evidence that can be objectively verified. However, estimating future Swiss taxable income requires judgment, specifically related to assumptions about expected growth rates of future Swiss taxable income, which are based primarily on third party market and industry growth data. Actual results that differ materially from those estimates could have a material impact on our valuation allowance assessment. Swiss interest rates have an impact on the valuation allowance and are based on published Swiss guidance. Switzerland has a seven-year carryforward period and does not permit the carry back of losses. Any significant changes to the Swiss interest rates or tax laws on loss carryforward periods could result in a material impact to the valuation allowance. Actions we take in connection with acquisitions could also impact the utilization of our Swiss deferred tax asset.

49

Table of Contents

(3)  FAIR VALUE MEASUREMENTS
There are various valuation techniques used to estimate fair value, the primary one being the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability. We measure certain financial and nonfinancial assets and liabilities at fair value on a recurring and nonrecurring basis.
Fair Value Hierarchy
The three levels of inputs that may be used to measure fair value are as follows:
• Level 1 . Quoted prices in active markets for identical assets or liabilities.
• Level 2 . Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities.
• Level 3 . Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As of March 31, 2026 and 2025, our assets and liabilities that were measured and recorded at fair value on a recurring basis were as follows (in millions):
    Fair Value Measurements at Reporting Date Using  
  As of
March 31, 2026
Quoted Prices in
Active Markets for Identical
Financial Instruments Significant
Other
Observable
Inputs Significant
Unobservable
Inputs  
  (Level 1) (Level 2) (Level 3) Balance Sheet Classification
Assets
Bank and time deposits $ 33   $ 33   $ —   $ —   Cash equivalents
Money market funds 502   502   —   —   Cash equivalents
Available-for-sale securities:
Corporate bonds 52   —   52   —   Short-term investments
U.S. Treasury securities 33   33   —   —   Short-term investments

U.S. agency securities
2   —   2   —   Short-term investments
Foreign government securities
5   —   5   —   Short-term investments
Asset-backed securities 24   —   24   —   Short-term investments

Foreign currency derivatives 35   —   35   —   Other current assets and other assets
Deferred compensation plan assets (a)
46   46   —   —   Other assets
Total assets at fair value $ 732   $ 614   $ 118   $ —  
Liabilities
Foreign currency derivatives $ 25   $ —   $ 25   $ —   Accounts payable, accrued, and other current liabilities and other liabilities
Deferred compensation plan liabilities (a)
46   46   —   —   Other liabilities
Total liabilities at fair value $ 71   $ 46   $ 25   $ —  

50

Table of Contents

    Fair Value Measurements at Reporting Date Using  
  As of
March 31,
2025 Quoted Prices in
Active Markets for Identical
Financial Instruments Significant
Other
Observable
Inputs Significant
Unobservable
Inputs  
  (Level 1) (Level 2) (Level 3) Balance Sheet Classification
Assets
Bank and time deposits $ 58   $ 58   $ —   $ —   Cash equivalents
Money market funds 904   904   —   —   Cash equivalents
Available-for-sale securities:
Corporate bonds 46   —   46   —   Short-term investments
U.S. Treasury securities 12   12   —   —   Short-term investments

Foreign government securities 4   —   4   —   Short-term investments
Asset-backed securities 50   —   50   —   Short-term investments

Foreign currency derivatives 28   —   28   —   Other current assets and other assets
Deferred compensation plan assets (a)
36   36   —   —   Other assets
Total assets at fair value $ 1,138   $ 1,010   $ 128   $ —  
Liabilities
Foreign currency derivatives $ 26   $ —   $ 26   $ —   Accounts payable, accrued, and other current liabilities and other liabilities
Deferred compensation plan liabilities (a)
36   36   —   —   Other liabilities
Total liabilities at fair value $ 62   $ 36   $ 26   $ —  

(a) The Deferred Compensation Plan consists of various mutual funds. See Note 14 for additional information regarding our Deferred Compensation Plan.
51

Table of Contents

(4)  FINANCIAL INSTRUMENTS
Cash and Cash Equivalents
As of March 31, 2026 and 2025, our cash and cash equivalents were $ 2,864 million and $ 2,136 million, respectively. Cash equivalents were valued using quoted market prices or other readily available market information.
Short-Term Investments
Short-term investments consisted of the following as of March 31, 2026 and 2025 (in millions):

  As of March 31, 2026
As of March 31, 2025

  Cost or
Amortized
Cost Gross Unrealized Fair
Value Cost or
Amortized
Cost Gross Unrealized Fair
Value
  Gains Losses Gains Losses
Corporate bonds $ 52   $ —   $ —   $ 52   $ 46   $ —   $ —   $ 46  
U.S. Treasury securities 33   —   —   33   12   —   —   12  
U.S. agency securities 2   —   —   2   —   —   —   —  

Foreign government securities 5   —   —   5   4   —   —   4  
Asset-backed securities 24   —   —   24   50   —   —   50  

Short-term investments $ 116   $ —   $ —   $ 116   $ 112   $ —   $ —   $ 112  

The following table summarizes the amortized cost and fair value of our short-term investments, classified by stated maturity as of March 31, 2026 and 2025 (in millions):
  As of March 31, 2026
As of March 31, 2025

  Amortized
Cost Fair
Value Amortized
Cost Fair
Value
Short-term investments
Due within 1 year $ 70   $ 70   $ 46   $ 46  
Due 1 year through 5 years 45   45   63   63  
Due after 5 years 1   1   3   3  
Short-term investments $ 116   $ 116   $ 112   $ 112  

52

Table of Contents

(5)  DERIVATIVE FINANCIAL INSTRUMENTS
Assets or liabilities associated with our derivative instruments and hedging activities are recorded at fair value in other current assets/other assets, or accounts payable, accrued, and other current liabilities/other liabilities, respectively, on our Consolidated Balance Sheets. As discussed below, the accounting for gains and losses resulting from changes in fair value depends on the use of the derivative instrument and whether it is designated and qualifies for hedge accounting.
We transact business in various foreign currencies and have significant international sales and expenses denominated in foreign currencies, subjecting us to foreign currency risk. We purchase foreign currency forward contracts, generally with maturities of 18 months or less, to reduce the volatility of cash flows primarily related to forecasted revenue and expenses denominated in certain foreign currencies. Our cash flow risks are primarily related to fluctuations in the Euro, British pound sterling, Canadian dollar, Swedish krona, Australian dollar, Japanese yen, Chinese yuan, South Korean won and Polish zloty. In addition, we utilize foreign currency forward contracts to mitigate foreign currency exchange risk associated with foreign-currency-denominated monetary assets and liabilities, primarily intercompany receivables and payables. The foreign currency forward contracts not designated as hedging instruments generally have a contractual term of approximately three months or less and are transacted near month-end. We do not use foreign currency forward contracts for speculative trading purposes.
Cash Flow Hedging Activities
Certain of our forward contracts are designated and qualify as cash flow hedges. To qualify for hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedges and must be highly effective in offsetting changes to future cash flows on hedged transactions. Gains or losses resulting from changes in the fair value of these hedges are initially reported, net of tax, as a component of accumulated other comprehensive income (loss) in stockholders’ equity. The gains or losses resulting from changes in the fair value of these hedges are subsequently reclassified into net revenue or research and development expenses, as appropriate, in the period when the forecasted transaction is recognized in our Consolidated Statements of Operations. In the event that the underlying forecasted transactions do not occur, or it becomes remote that they will occur within the defined hedge period, the gains or losses on the related cash flow hedges are reclassified from accumulated other comprehensive income (loss) to interest and other income (expense), net, in our Consolidated Statements of Operations.
Total gross notional amounts and fair values for currency derivatives with cash flow hedge accounting designation are as follows (in millions):
As of March 31, 2026
As of March 31, 2025

Notional Amount Fair Value Notional Amount Fair Value
Asset Liability Asset Liability

Forward contracts to purchase $ 428   $ 4   $ 4   $ 463   $ 4   $ 7  

Forward contracts to sell $ 1,576   $ 28   $ 15   $ 1,970   $ 20   $ 16  

The effects of cash flow hedge accounting in our Consolidated Statements of Operations for the fiscal years ended March 31, 2026, 2025, and 2024 are as follows (in millions):
Year Ended March 31,
2026 2025 2024
Net revenue Research and development Net revenue Research and development Net revenue Research and development
Total amounts presented in our Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 7,531   $ 2,828   $ 7,463   $ 2,569   $ 7,562   $ 2,420  
Gains (losses) on foreign currency forward contracts designated as cash flow hedges $ ( 42 ) $ 6   $ 18   $ ( 11 ) $ 56   $ ( 8 )

Balance Sheet Hedging Activities
Our foreign currency forward contracts that are not designated as hedging instruments are accounted for as derivatives, with gains and losses resulting from changes in the fair value are reported in interest and other income (expense), net, in our Consolidated Statements of Operations. These gains and losses on these foreign currency forward contracts generally offset the gains and losses in the underlying foreign-currency-denominated monetary assets and liabilities, which are also reported in interest and other income (expense), net, in our Consolidated Statements of Operations.
Total gross notional amounts and fair values for currency derivatives that are not designated as hedging instruments are accounted for as follows (in millions):
As of March 31, 2026
As of March 31, 2025

Notional Amount Fair Value Notional Amount Fair Value
Asset Liability Asset Liability
Forward contracts to purchase $ 638   $ —   $ 6   $ 511   $ 1   $ 2  

Forward contracts to sell $ 554   $ 3   $ —   $ 582   $ 3   $ 1  

The effect of foreign currency forward contracts not designated as hedging instruments in our Consolidated Statements of Operations for the fiscal years ended March 31, 2026, 2025, and 2024, was as follows (in millions):

  Year Ended March 31,
  2026 2025 2024
Interest and other income (expense), net
Total amounts presented in our Consolidated Statements of Operations in which the effects of balance sheet hedges are recorded $ 18   $ 85   $ 71  
Gains (losses) on foreign currency forward contracts not designated as hedging instruments $ ( 10 ) $ 45   $ 12  

53

Table of Contents

(6) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The changes in accumulated other comprehensive income (loss) by component, net of tax, for the fiscal years ended March 31, 2026, 2025, and 2024 are as follows (in millions):
Unrealized Net Gains (Losses) on Available-for-Sale Securities Unrealized Net Gains (Losses) on Derivative Instruments Foreign Currency Translation Adjustments Total
Balances as of March 31, 2023 $ ( 1 ) $ 13   $ ( 79 ) $ ( 67 )
Other comprehensive income (loss) before reclassifications 1   45   ( 3 ) 43  
Amounts reclassified from accumulated other comprehensive income (loss) —   ( 48 ) —   ( 48 )
Total other comprehensive income (loss), net of tax 1   ( 3 ) ( 3 ) ( 5 )
Balances as of March 31, 2024 $ —   $ 10   $ ( 82 ) $ ( 72 )
Other comprehensive income (loss) before reclassifications —   8   ( 16 ) ( 8 )
Amounts reclassified from accumulated other comprehensive income (loss) —   ( 7 ) —   ( 7 )
Total other comprehensive income (loss), net of tax —   1   ( 16 ) ( 15 )
Balances as of March 31, 2025 $ —   $ 11   $ ( 98 ) $ ( 87 )
Other comprehensive income (loss) before reclassifications —   ( 59 ) 8   ( 51 )
Amounts reclassified from accumulated other comprehensive income (loss) —   36   —   36  
Total other comprehensive income (loss), net of tax —   ( 23 ) 8   ( 15 )
Balances as of March 31, 2026 $ —   $ ( 12 ) $ ( 90 ) $ ( 102 )

The effects on net income of amounts reclassified from accumulated other comprehensive income (loss) for the fiscal years ended March 31, 2026, 2025, and 2024 were as follows (in millions):
 Statement of Operations Classification Amount Reclassified From Accumulated Other Comprehensive Income (Loss)
Year Ended March 31,
2026 2025 2024

(Gains) losses on foreign currency forward contracts designated as cash flow hedges
Net revenue $ 42   $ ( 18 ) $ ( 56 )
Research and development ( 6 ) 11   8  
Total net (gain) loss reclassified, net of tax $ 36   $ ( 7 ) $ ( 48 )

54

Table of Contents

(7) GOODWILL AND ACQUISITION-RELATED INTANGIBLES, NET
The changes in the carrying amount of goodwill for the fiscal year ended March 31, 2026 are as follows (in millions):

As of
March 31, 2025
Activity Effects of Foreign Currency Translation As of
March 31, 2026

Goodwill $ 5,744   $ 9   $ 3   $ 5,756  
Accumulated impairment ( 368 ) —  —  ( 368 )
Total $ 5,376   $ 9   $ 3   $ 5,388  

The changes in the carrying amount of goodwill for the fiscal year ended March 31, 2025 are as follows (in millions):

As of
March 31, 2024
Activity Effects of Foreign Currency Translation As of
March 31, 2025

Goodwill $ 5,747   $ —   $ ( 3 ) $ 5,744  
Accumulated impairment ( 368 ) —  —  ( 368 )
Total $ 5,379   $ —   $ ( 3 ) $ 5,376  

During the fiscal year ended March 31, 2026, we completed one acquisition that was not material to our Consolidated Financial Statements.
Acquisition-related intangibles consisted of the following (in millions):

  As of March 31, 2026
As of March 31, 2025

  Gross
Carrying
Amount Accumulated
Amortization Acquisition-
Related
Intangibles, Net Gross
Carrying
Amount Accumulated
Amortization Acquisition-
Related
Intangibles, Net

Developed and core technology $ 938   $ ( 848 ) $ 90   $ 933   $ ( 790 ) $ 143  
Trade names and trademarks 501   ( 396 ) 105   501   ( 351 ) 150  
Registered user base and other intangibles 56   ( 56 ) —   56   ( 56 ) —  

Total $ 1,495   $ ( 1,300 ) $ 195   $ 1,490   $ ( 1,197 ) $ 293  

Amortization of intangibles, including impairments, for the fiscal years ended March 31, 2026, 2025, and 2024 are classified in the Consolidated Statements of Operations as follows (in millions):
  Year Ended March 31,
  2026 2025 2024
Cost of revenue $ 37   $ 40   $ 76  

Operating expenses 66   67   142  

Total $ 103   $ 107   $ 218  

During fiscal years 2026 and 2025, we did not recognize any material impairment charges for acquisition-related intangible assets.
During fiscal year 2024, we recorded impairment charges of $ 70  million for acquisition-related intangible assets, of which $ 53 million was recorded within operating expenses and $ 17  million was recorded within cost of revenue.
Acquisition-related intangible assets are generally amortized using the straight-line method over the lesser of their estimated useful lives or the agreement terms, currently ranging from 2 to 7 years. As of March 31, 2026 and 2025, the weighted-average remaining useful life for acquisition-related intangible assets was approximately 2.3 years and 3.2 years, respectively.
55

Table of Contents

As of March 31, 2026, future amortization of finite-lived acquisition-related intangibles that will be recorded in the Consolidated Statements of Operations is estimated as follows (in millions):

Fiscal Year Ending March 31,  
2027 $ 85  
2028 82  
2029 28  

Total $ 195  

56

Table of Contents

(8) ROYALTIES AND LICENSES
Our royalty expenses consist of payments to (1) content licensors, (2) independent software developers, and (3) co-publishing and/or distribution affiliates. Content license royalties consist of payments made to sports organizations, movie studios, and others for our use of their trademarks, copyrights, personal publicity rights, content and/or other intellectual property. Royalty payments to independent software developers are payments for the development of intellectual property related to our games. Co-publishing and distribution royalties are payments made to third parties for the delivery of products.
During fiscal years 2026 and 2025, we did not recognize any material losses or impairment charges on royalty-based commitments.
During fiscal year 2024, we recorded impairment charges of $ 30  million for costs associated with licensor commitments, all of which were recorded within Restructuring in the Consolidated Statements of Operations.
The current and long-term portions of prepaid royalties and minimum guaranteed royalty-related assets, included in other current assets and other assets, consisted of (in millions):
  As of March 31,
  2026 2025
Other current assets $ 40   $ 55  
Other assets 12   23  
Royalty-related assets $ 52   $ 78  

At any given time, depending on the timing of our payments to our content licensors, independent software developers, co-publishing, and/or distribution affiliates, we classify any recognized unpaid royalty amounts due to these parties as accrued liabilities. The current and long-term portions of accrued royalties, included in accrued and other current liabilities and other liabilities, consisted of (in millions):
  As of March 31,
  2026 2025
Accounts payable, accrued, and other current liabilities $ 221   $ 226  
Other liabilities —   9  
Royalty-related liabilities $ 221   $ 235  

As of March 31, 2026, we were committed to pay approximately $ 2,058 million to content licensors, independent software developers, and co-publishing and/or distribution affiliates, but performance remained with the counterparty (i.e., delivery of the product or content or other factors) and such commitments were therefore not recorded in our Consolidated Financial Statements. See Note 13 for further information on our developer and licensor commitments.
57

Table of Contents

(9)  BALANCE SHEET DETAILS
Property and Equipment, Net
Property and equipment, net, as of March 31, 2026 and 2025 consisted of (in millions):
  As of March 31,
  2026 2025
Computer, equipment and software $ 1,117   $ 1,033  
Buildings 393   379  
Leasehold improvements 237   229  
Equipment, furniture and fixtures, and other 119   109  
Land 66   66  
Construction in progress 38   21  
1,970   1,837  
Less: accumulated depreciation ( 1,357 ) ( 1,251 )
Property and equipment, net $ 613   $ 586  

Depreciation expense associated with property and equipment was $ 216 million, $ 204 million and $ 196 million for the fiscal years ended March 31, 2026, 2025, and 2024, respectively.
Accounts Payable, Accrued, and Other Current Liabilities
Accounts payable, accrued, and other current liabilities as of March 31, 2026 and 2025 consisted of (in millions):
  As of March 31,
  2026 2025
Accounts payable $ 128   $ 105  
Accrued compensation and benefits 563   486  
Accrued royalties 221   226  
Deferred net revenue (other) 112   94  
Operating lease liabilities (See Note 12 )
63   67  

Other accrued expenses 396   297  
Sales returns and price protection reserves 81   84  
Accounts payable, accrued, and other current liabilities $ 1,564   $ 1,359  

Deferred net revenue (other) includes the deferral of licensing arrangements, subscription revenue, and other revenue for which revenue recognition criteria has not been met.
Deferred net revenue
Deferred net revenue as of March 31, 2026 and 2025, consisted of (in millions):
As of March 31,
2026 2025
Deferred net revenue (online-enabled games) $ 2,233   $ 1,700  
Deferred net revenue (other) 112   94  
Deferred net revenue (noncurrent) 70   72  
Total deferred net revenue $ 2,415   $ 1,866  

During the fiscal years ended March 31, 2026 and 2025, we recognized $ 1,775 million and $ 1,875 million of revenue, respectively, that were included in the deferred net revenue balance at the beginning of the period.
58

Table of Contents

Remaining Performance Obligations
As of March 31, 2026, revenue allocated to remaining performance obligations consists of our deferred revenue balance of $ 2,415 million. These balances exclude any estimates for future variable consideration as we have elected the optional exemption to exclude sales-based royalty revenue.
59

Table of Contents

(10)  INCOME TAXES
On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (“OBBB”) which extended or modified certain corporate tax provisions under the 2017 Tax Cuts and Jobs Act (“TCJA”). The OBBB modified certain business deductions, including allowing for immediate expensing of U.S. research & development expenditures, effective in our current fiscal year. The OBBB also modified various international tax provisions which were set to change or expire after 2025 under the TCJA. Such modifications, including U.S. taxation of profits derived from foreign operations and associated foreign tax credit limitations, are effective in our fiscal year 2027. The changes resulting from the tax provisions of OBBB are not expected to have a material impact on our results of operations.

The European Union and other countries, including Switzerland, have enacted, or have committed to enact global minimum taxes, commonly referred to as Pillar II, as proposed by the Organization for Economic Cooperation and Development (“OECD”), effective with our fiscal year 2025. Pillar II in the relevant countries where we operate did not have a material impact on our tax provision. On January 5, 2026, the OECD published details of a side-by-side package for the Pillar II global minimum tax rules. The package includes an extension of the transitional safe harbor and new permanent safe harbor rules, including the exemption of U.S.-parented multinationals from certain Pillar II global minimum taxes effective in our fiscal year 2027. We do not expect the package to have material impact on our financial results and will continue to monitor legislative updates in our operating jurisdictions.

The components of our income before provision for income taxes for the fiscal years ended March 31, 2026, 2025, and 2024 are as follows (in millions):
  Year Ended March 31,
  2026 2025 2024
Domestic $ 265   $ 447   $ 437  
Foreign 915   1,158   1,152  
Income before provision for income taxes $ 1,180   $ 1,605   $ 1,589  

Provision for income taxes for the fiscal years ended March 31, 2026, 2025, and 2024 consisted of (in millions):

  Current Deferred Total
Year Ended March 31, 2026

Federal $ 137   $ ( 29 ) $ 108  
State 20   ( 7 ) 13  
Foreign 146   26   172  
$ 303   $ ( 10 ) $ 293  
Year Ended March 31, 2025

Federal $ 369   $ ( 136 ) $ 233  
State 53   ( 28 ) 25  
Foreign 102   124   226  
$ 524   $ ( 40 ) $ 484  
Year Ended March 31, 2024

Federal $ 138   $ 85   $ 223  
State 20   9   29  
Foreign 76   ( 12 ) 64  
$ 234   $ 82   $ 316  

The differences between the statutory tax rate and our effective tax rate for the fiscal year ended March 31, 2026 after the adoption of ASU 2023-09 are as follows:
60

Table of Contents

  Year Ended March 31, 2026
  Amount Percent
Statutory federal tax expense rate $ 248   21.0   %
State and local income taxes, net of federal benefit 3   0.3   %
Foreign tax effects
Singapore
Nontaxable interest income ( 76 ) ( 6.6 ) %
Statutory income tax rate differential ( 18 ) ( 1.5 ) %
Switzerland
Statutory income tax rate differential ( 19 ) ( 1.6 ) %
Other foreign jurisdictions 36   3.1   %
Effect of cross-border tax laws (a)
73   6.2   %
Research and development tax credits ( 37 ) ( 3.1 ) %
Changes in unrecognized tax benefits (b)
77   6.5   %
Other adjustments (c)
6   0.5   %
Effective tax rate $ 293   24.8   %
(a) Effect of cross-border tax laws are presented on a net basis, primarily related to global intangible low-taxed income.
(b) Changes in unrecognized tax benefits are presented on an aggregated basis for all jurisdictions.
(c) Includes change in valuation allowances, and nontaxable or nondeductible items.

The differences between the statutory tax rate and our effective tax rate, expressed as a percentage of income before provision for income taxes, for the fiscal years ended March 31, 2025, and 2024 prior to the adoption of ASU 2023-09 were as follows:

  Year Ended March 31,
  2025 2024
Statutory federal tax expense rate 21.0   % 21.0   %
State taxes, net of federal benefit 0.9   % 1.1   %
Differences between statutory rate and foreign effective tax rate 3.8   % 2.9   %

Research and development credits ( 2.3 ) % ( 2.4 ) %

Swiss valuation allowance 3.2   % ( 0.3 ) %

Effect of change in enacted tax rate —   % ( 5.8 ) %
Non-deductible stock-based compensation 3.2   % 2.8   %
Other 0.4   % 0.6   %
Effective tax rate 30.2   % 19.9   %

During the fiscal year ended March 31, 2026, we recognized $ 24  million of tax benefit from higher excess stock-based compensation in various jurisdictions. Excluding the effect of the excess stock-based compensation, the effective tax rate for fiscal year 2026 would have been 26.9 percent.

During the fiscal year ended March 31, 2025, we recognized a $ 51  million tax charge to increase the valuation allowance on Swiss deferred tax assets as a result of various factors including our business operations, geographical income mix, and an increase in the Swiss interest rates. Excluding the effect of the change in valuation allowance, the effective tax rate for fiscal year 2025 would have been 27.0 percent.

During the fiscal year ended March 31, 2024, we recognized a $ 92  million tax benefit to remeasure our Swiss deferred tax assets as a result of an increase in the Swiss statutory tax rate. In addition, we recognized a lower period cost for U.S. tax on our non-U.S. earnings, including a cumulative one-time benefit, due to R&D capitalization guidance issued by the U.S. Treasury during the fiscal year. Excluding the effects of these items, the effective tax rate for fiscal year 2024 would have been 26.7 percent.

61

Table of Contents

I ncome taxes paid, net of refunds received, for the fiscal year ended March 31, 2026 were as follows (in millions):

  Year Ended March 31, 2026
U.S. federal $ 91  
U.S. state and local 19  
Foreign
        Canada - British Columbia 20  
        Canada - federal 15  
        Other 56  
Income taxes paid, net of refunds $ 201  

Income taxes paid, net of refunds received, for the fiscal years ended March 31, 2025 and 2024 were $ 404  million and $ 300  million, respectively.

Our foreign subsidiaries are generally subject to U.S. tax, and to the extent earnings from these subsidiaries can be repatriated without a material tax cost, such earnings will not be indefinitely reinvested. As of March 31, 2026, approximately $ 796  million of our cash and cash equivalents were domiciled in foreign tax jurisdictions. All of our foreign cash is available for repatriation without a material tax cost.
The components of net deferred tax assets, as of March 31, 2026 and 2025 consisted of (in millions):

  As of March 31,
  2026 2025
Deferred tax assets:
Accruals, reserves and other expenses $ 239   $ 227  
Tax credit carryforwards 250   235  
Research and development capitalization 537   523  

Stock-based compensation 42   43  
Amortization and depreciation 15   —  
Net operating loss and capital loss carryforwards 544   450  
Swiss intra-entity tax asset 1,355   1,485  
Total 2,982   2,963  
Valuation allowance ( 544 ) ( 534 )
Deferred tax assets, net of valuation allowance 2,438   2,429  
Deferred tax liabilities:
Amortization and depreciation —   ( 7 )
Other ( 6 ) ( 3 )
Total ( 6 ) ( 10 )
Deferred tax assets, net of valuation allowance and deferred tax liabilities $ 2,432   $ 2,419  

As of March 31, 2026, we have net operating loss carry forwards of approximately $ 3.6  billion of which approximately $ 40  million is attributable to various acquired companies. The net operating loss carry forwards include $ 3.6  billion related to Switzerland and $ 52  million related to U.S. states and other foreign jurisdictions. Substantially all of these carryforwards, if not fully realized, will begin to expire in fiscal year 2027. Switzerland has a seven-year carryforward period and does not permit the carry back of losses. We also have U.S. federal credit carryforwards of $ 15  million and California credit carryforwards of $ 224  million. The California tax credit carryforwards can be carried forward indefinitely.
As of March 31, 2026, we maintained a total valuation allowance of $ 544 million related to certain U.S. state deferred tax assets, Swiss deferred tax assets, and foreign capital loss carryovers, due to uncertainty about the future realization of these assets.
62

Table of Contents

The total unrecognized tax benefits as of March 31, 2026, 2025, and 2024 were $ 677 million, $ 688 million and $ 804 million, respectively. A reconciliation of the beginning and ending balance of unrecognized tax benefits is summarized as follows (in millions):

Balance as of March 31, 2023 $ 867  
Increases in unrecognized tax benefits related to prior year tax positions 14  
Decreases in unrecognized tax benefits related to prior year tax positions ( 173 )
Increases in unrecognized tax benefits related to current year tax positions 97  

Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations ( 2 )
Changes in unrecognized tax benefits due to foreign currency translation 1  
Balance as of March 31, 2024 804  
Increases in unrecognized tax benefits related to prior year tax positions 18  
Decreases in unrecognized tax benefits related to prior year tax positions ( 214 )
Increases in unrecognized tax benefits related to current year tax positions 94  
Decreases in unrecognized tax benefits related to settlements with taxing authorities ( 12 )
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations ( 2 )

Balance as of March 31, 2025 688  
Increases in unrecognized tax benefits related to prior year tax positions 41  
Decreases in unrecognized tax benefits related to prior year tax positions ( 22 )
Increases in unrecognized tax benefits related to current year tax positions 63  
Decreases in unrecognized tax benefits related to settlements with taxing authorities ( 94 )
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations ( 5 )
Changes in unrecognized tax benefits due to foreign currency translation 6  
Balance as of March 31, 2026 $ 677  

As of March 31, 2026, approximately $ 556  million of the unrecognized tax benefits would affect our effective tax rate, a portion of which would be impacted by a valuation allowance.
Interest and penalties related to estimated obligations for tax positions taken in our tax returns are recognized in income tax expense in our Consolidated Statements of Operations. The combined amount of accrued interest and penalties related to tax positions taken on our tax returns and included in non-current other liabilities was approximately $ 154  million as of March 31, 2026 and $ 127  million as of March 31, 2025.
We file income tax returns in the United States, including various state and local jurisdictions. As of March 31, 2026, our subsidiaries file tax returns in various foreign jurisdictions, including Canada, Germany, South Korea, Switzerland, and the United Kingdom. As of the period ended March 31, 2026, we remain subject to income tax examination in these jurisdictions, including the United States for fiscal years after 2017, Canada for fiscal years after 2015, Germany for fiscal years after 2019, South Korea for fiscal years after 2018, Switzerland for fiscal years after 2015, and the United Kingdom for fiscal years after 2021.
We are currently under income tax examination in various jurisdictions, including the United States for fiscal years 2018 through 2022.
The timing and potential resolution of income tax examinations is highly uncertain. While we continue to measure our uncertain tax positions, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued.
It is also reasonably possible that a material reduction of unrecognized tax benefits may occur within the next 12 months, impacting our effective tax rate. The actual amount could vary significantly depending on the ultimate timing and nature of any settlements and tax interpretations.
63

Table of Contents

(11)  FINANCING ARRANGEMENTS
Senior Notes
In February 2021, we issued $ 750 million aggregate principal amount of 1.85 % Senior Notes due February 15, 2031 (the “2031 Notes”) and $ 750 million aggregate principal amount of 2.95 % Senior Notes due February 15, 2051 (the “2051 Notes”). Our proceeds were $ 1,478  million, net of discount of $ 6  million and issuance costs of $ 16  million. Both the discount and issuance costs are being amortized to interest expense over the respective terms of the 2031 Notes and the 2051 Notes using the effective interest rate method. The effective interest rate is 1.98 % for the 2031 Notes and 3.04 % for the 2051 Notes. Interest is payable semiannually in arrears, on February 15 and August 15 of each year.
In February 2016, we issued $ 400 million aggregate principal amount of 4.80 % Senior Notes due March 1, 2026 (the “2026 Notes”). Our proceeds were $ 395 million, net of discount of $ 1 million and issuance costs of $ 4 million. Both the discount and issuance costs are being amortized to interest expense over the term of the 2026 Notes using the effective interest rate method. The effective interest rate was 4.97 %. Interest is payable semiannually in arrears, on March 1 and September 1 of each year. We redeemed all of the $ 400  million outstanding aggregate principal amount of the 2026 Notes during the fourth quarter of fiscal year 2026.
The carrying and fair values of the Senior Notes are as follows (in millions):

   
As of
March 31, 2026
As of
March 31, 2025

Senior Notes:
4.80 % Senior Notes due 2026
$ —   $ 400  
1.85 % Senior Notes due 2031
750   750  
2.95 % Senior Notes due 2051
750   750  
Total principal amount $ 1,500   $ 1,900  
Unaccreted discount ( 4 ) ( 5 )
Unamortized debt issuance costs ( 11 ) ( 11 )
Net carrying value of Senior Notes $ 1,485   $ 1,884  

Fair value of Senior Notes (Level 2) $ 1,292   $ 1,511  

As of March 31, 2026, the remaining life of the 2031 Notes and 2051 Notes is approximately 4.9 years and 24.9 years, respectively.
The Senior Notes are senior unsecured obligations and rank equally with all our other existing and future unsubordinated obligations and any indebtedness that we may incur from time to time under our Credit Facility.
The 2031 Notes and 2051 Notes are redeemable at our option at any time prior to November 15, 2030 and August 15, 2050, respectively, subject to a make-whole premium. After such dates, we may redeem each such series of Notes, respectively, at a redemption price equal to 100 % of the aggregate principal amount plus accrued and unpaid interest. In addition, upon the occurrence of a change of control repurchase event, the holders of each such series of Notes may require us to repurchase all or a portion of these Notes, at a price equal to 101 % of their principal amount, plus accrued and unpaid interest to the date of repurchase. Each such series of Notes also include covenants that limit our ability to incur liens on assets and to enter into sale and leaseback transactions, subject to certain allowances.
64

Table of Contents

Credit Facility
On March 22, 2023, we entered into a $ 500  million unsecured revolving credit facility (the “Credit Facility") with a syndicate of banks. The Credit Facility terminates on March 22, 2028 unless the maturity is extended in accordance with its terms. The Credit Facility contains an option to arrange with existing lenders and/or new lenders to provide up to an aggregate of $ 500  million in additional commitments for revolving loans. Proceeds of loans made under the Credit Facility may be used for general corporate purposes.
The loans denominated in U.S. dollars bear interest, at our option, at the base rate plus an applicable spread or at a forward-looking term rate based upon the secured overnight financing rate plus a credit spread adjustment of 0.10 % per annum (the “Adjusted Term SOFR Rate”) plus an applicable spread, in each case with such spread based on our debt credit ratings. We are also obligated to pay other customary fees for a credit facility of this size and type. Interest is due and payable in arrears quarterly for loans bearing interest at the base rate and at the end of an interest period in the case of loans bearing interest at the Adjusted Term SOFR Rate. Principal, together with all accrued and unpaid interest, is due and payable on the maturity date, as such date may be extended in connection with the extension option. We may prepay the loans and terminate the commitments, in whole or in part, at any time without premium or penalty, subject to certain conditions.

The Credit Facility contains customary affirmative and negative covenants, including covenants that limit or restrict our ability to, among other things, incur subsidiary indebtedness, grant liens, and dispose of all or substantially all assets, in each case subject to customary exceptions for a credit facility of this size and type. We are also required to maintain compliance with a debt to EBITDA ratio. As of March 31, 2026, we were in compliance with the debt to EBITDA ratio.
The Credit Facility contains customary events of default, including among others, non-payment defaults, covenant defaults, cross-defaults to material indebtedness, bankruptcy and insolvency defaults, material judgment defaults and a change of control default, in each case, subject to customary exceptions for a credit facility of this size and type. The occurrence of an event of default could result in the acceleration of the obligations under the Credit Facility and an increase in the applicable interest rate.
As of March 31, 2026, no amounts were outstanding under the Credit Facility. $ 2 million of debt issuance costs that were paid in connection with obtaining this credit facility are being amortized to interest expense over the 5-year term of the Credit Facility.
Interest Expense
The following table summarizes our interest expense recognized for fiscal years 2026, 2025, and 2024 that is included in interest and other income (expense), net on our Consolidated Statements of Operations (in millions):

Year Ended March 31,
2026 2025 2024

Amortization of debt issuance costs $ ( 2 ) $ ( 2 ) $ ( 2 )
Coupon interest expense ( 51 ) ( 55 ) ( 55 )
Other interest expense —   ( 1 ) ( 1 )
Total interest expense $ ( 53 ) $ ( 58 ) $ ( 58 )

65

Table of Contents

(12) LEASES
Our leases primarily consist of facility leases for our offices and development studios, data centers, and server equipment, with remaining lease terms of up to 11 years. Our lease terms may include options to extend or terminate the lease. When it is reasonably certain that we will exercise those options, we include them in our measurement of lease payments and lease terms. Substantially all of our leases are classified as operating leases.
We determine if an arrangement is or contains a lease at contract inception. The contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In determining if a contract is or contains a lease, we apply judgment whether the contract provides the right to obtain substantially all of the economic benefits, the right to direct, or control the use of the identified asset throughout the period of use.
Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the commencement date based on the present value of future lease payments over the lease term. In determining the present value of the future lease payments, we use our incremental borrowing rate as none of our leases provide an implicit rate. Our incremental borrowing rate is an assumed rate based on our credit rating, credit history, current economic environment, and the lease term. Operating lease ROU assets are further adjusted for any payments made, incentives received, and initial direct costs incurred prior to the commencement date.
Operating lease ROU assets are amortized on a straight-line basis over the lease term and recognized as lease expense within cost of revenue or operating expenses on our Consolidated Statements of Operations. Operating lease liabilities decrease by lease payments we make over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. When we commit to a plan to abandon an operating lease at a future date, the amortization of the operating lease ROU asset and depreciation of the associated leasehold improvements are accelerated based on the revised useful life of the operating lease.
Some of our operating leases contain lease and non-lease components. Non-lease components primarily include fixed payments for common area maintenance and utilities. We elected to account for lease and non-lease components as a single lease component. Variable lease and non-lease components are recognized on our Consolidated Statements of Operations as incurred.
The components of lease expenses for the fiscal years ended March 31, 2026, 2025, and 2024 are as follows (in millions):

Year Ended March 31,
2026 2025 2024
Operating lease costs $ 69   $ 121   $ 80  
Variable lease costs 31   32   31  

Total lease expense $ 100   $ 153   $ 111  

During fiscal years 2026 and 2024, we did not record any material impairments of operating lease right-of-use assets or associated property, plant, and equipment. During fiscal year 2025, we recorded $ 52  million of impairments of operating lease right-of-use assets and associated property, plant, and equipment related to certain operating leases, which are included in operating lease costs presented in the table above.

During the fiscal years ended March 31, 2026, 2025, and 2024, we did not incur material costs associated with short-term leases with an initial term of 12 months or less.

Supplemental cash and noncash information related to our operating leases for the fiscal years ended March 31, 2026, 2025, and 2024 are as follows (in millions):
Year Ended March 31,
2026 2025 2024
Cash paid for amounts included in the measurement of lease liability $ 81   $ 87   $ 74  
ROU assets obtained in exchange for new lease obligations $ 96   $ 97   $ 37  

Weighted average remaining lease term and discount rate at March 31, 2026 and 2025 are as follows:
66

Table of Contents

At March 31, 2026
At March 31, 2025

Lease term 7.3 years 7.1 years
Discount rate 4.4   % 4.0   %

Operating lease ROU assets and liabilities recorded on our Consolidated Balance Sheets as of March 31, 2026 and 2025 are as follows (in millions):
As of March 31, Balance Sheet Classification

2026 2025
Operating lease ROU assets $ 283   $ 237   Other assets

Operating lease liabilities $ 63   $ 67   Accounts payable, accrued, and other current liabilities
Noncurrent operating lease liabilities 306   267   Other liabilities
Total operating lease liabilities $ 369  

$ 334  

Future minimum lease payments under operating leases as of March 31, 2026 were as follows (in millions):

Fiscal Years Ending March 31,

2027

$ 76  
2028

71  
2029

52  
2030

37  
2031

45  
Thereafter

153  
Total future lease payments

434  
Less imputed interest

( 65 )
Total operating lease liabilities

$ 369  

In addition to the amounts included in the table above, as of March 31, 2026, we have entered into two office leases that have not yet commenced with aggregate future lease payments of approximately $ 34  million. The leases are expected to commence in fiscal year 2027, and will have lease term ranging from 5 to 10 years .
67

Table of Contents

(13)  COMMITMENTS AND CONTINGENCIES
Development, Sports Organizations, and Other Content Licenses: Payments and Commitments
The products we produce in our studios are designed and created by our employee designers, artists, software programmers and by non-employee software developers (“independent artists” or “third-party developers”). We typically advance development funds to the independent artists and third-party developers during development of our games, usually in installment payments made upon the completion of specified development milestones. Contractually, these payments are generally considered advances against subsequent royalties on the sales of the products. These terms are set forth in written agreements entered into with the independent artists and third-party developers. In addition, we have certain sports organizations and other content license contracts that contain minimum guarantee payments and marketing commitments to promote the games we publish that may not be dependent on any deliverables.
These developer and content license commitments represent the sum of the cash payments for flat fees, minimum guaranteed payments, and service payments. The majority of these commitments are conditional upon performance by the counterparty. These payments and any related marketing and development commitments are included in the table below.
The following table summarizes our minimum contractual obligations as of March 31, 2026 (in millions):

Fiscal Years Ending March 31,
Total 2027 2028 2029 2030 2031 Thereafter
Unrecognized commitments
Developer/licensor commitments $ 2,058   $ 340   $ 474   $ 430   $ 415   $ 361   $ 38  
Marketing commitments 1,239   304   282   230   196   216   11  
Senior Notes interest 618   32   36   36   36   36   442  
Operating lease imputed interest 65   15   12   10   8   7   13  
Operating leases not yet commenced 34   2   4   5   5   5   13  
Other purchase obligations 376   101   121   97   39   14   4  

Total unrecognized commitments 4,390   794   929   808   699   639   521  

Recognized commitments
Senior Notes principal and interest 1,505   5   —   —   —   750   750  
Operating leases 369   61   59   42   29   38   140  

Total recognized commitments 1,874   66   59   42   29   788   890  

Total Commitments $ 6,264   $ 860   $ 988   $ 850   $ 728   $ 1,427   $ 1,411  

The unrecognized amounts represented in the table above reflect our minimum cash obligations for the respective fiscal years, but do not necessarily represent the periods in which they will be recognized and expensed in our Consolidated Financial Statements. In addition, the amounts in the table above are presented based on the dates the amounts are contractually due as of March 31, 2026; however, certain payment obligations may be accelerated depending on the performance of our operating results.
In addition to the amounts included in the table above, in our Consolidated Balance Sheets as of March 31, 2026, we had a net liability for unrecognized tax benefits and related interest totaling $ 654 million. While it is reasonably possible that a material reduction of unrecognized tax benefits may occur within the next 12 months, the actual amount could vary significantly depending on the ultimate timing and nature of any settlements and tax interpretations.
Legal Proceedings
We are subject to claims and litigation arising in the ordinary course of business. We do not believe that any liability from any reasonably foreseeable disposition of such claims and litigation, individually or in the aggregate, would have a material adverse effect on our Consolidated Financial Statements.
68

Table of Contents

(14)  STOCK-BASED COMPENSATION, EMPLOYEE BENEFIT PLANS, AND STOCK REPURCHASE PROGRAM

Valuation Assumptions
We recognize compensation cost for stock-based awards to employees based on the awards’ estimated grant-date fair value using a straight-line approach over the service period for which such awards are expected to vest. We account for forfeitures as they occur.
The estimation of the fair value of market-based restricted stock units, stock options and Employee Stock Purchase Plan (“ESPP”) purchase rights is affected by assumptions regarding subjective and complex variables. Generally, our assumptions are based on historical information and judgment is required to determine if historical trends may be indicators of future outcomes. We estimate the fair value of our stock-based awards as follows:
• Restricted Stock Units and Performance-Based Restricted Stock Units . The fair value of restricted stock units and performance-based restricted stock units (other than market-based restricted stock units) is determined based on the quoted market price of our common stock on the date of grant.
• Market-Based Restricted Stock Units . Market-based restricted stock units consist of grants of performance-based restricted stock units to certain members of executive management that vest contingent upon the achievement of pre-determined market and service conditions (referred to herein as “market-based restricted stock units”). The fair value of our market-based restricted stock units is estimated using a Monte-Carlo simulation model. Key assumptions for the Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation coefficient.
• Stock Options and ESPP . The fair value of stock options and stock purchase rights granted pursuant to our equity incentive plans and our 2000 Employee Stock Purchase Plan, as amended, respectively, is estimated using the Black-Scholes valuation model based on the multiple-award valuation method. Key assumptions of the Black-Scholes valuation model are the risk-free interest rate, expected volatility, expected term and expected dividends. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option. Expected volatility is based on a combination of historical stock price volatility and implied volatility of publicly-traded options on our common stock. An expected term is estimated based on historical exercise behavior, post-vesting termination patterns, options outstanding and future expected exercise behavior.
There were an insignificant number of stock options granted during fiscal years 2026, 2025, and 2024.
The estimated assumptions used in the Black-Scholes valuation model to value our ESPP purchase rights were as follows:

  ESPP Purchase Rights
  Year Ended March 31,
  2026 2025 2024
Risk-free interest rate 4.1 - 4.2 %
4.2 - 5.0 %
5.0 % - 5.5 %

Expected volatility 27 - 28 %
21 - 30 %
19 - 24 %

Weighted-average volatility 28 %
28 %
23 %

Expected term 6 - 12 months
6 - 12 months
6 - 12 months

Expected dividends 0.4 %
0.7   % 0.8   %

The assumptions used in the Monte-Carlo simulation model to value our market-based restricted stock units were as follows:

  Year Ended March 31,
2026 2025 2024
Risk-free interest rate 3.9 %
4.5   % 4.4 %

Expected volatility 24 - 43 %
23 - 43 %
25 - 59 %

Weighted-average volatility 30 %
31 %
39 %

Expected dividends None None None

69

Table of Contents

Summary of Plans and Plan Activity
Equity Incentive Plans
We have equity awards outstanding under two incentive plans: our 2019 Equity Incentive Plan (the “2019 Equity Plan”), as amended, and our 2000 Equity Incentive Plan, as amended (the “2000 Equity Plan”). Our 2019 Equity Plan allows us to grant options to purchase our common stock and to grant restricted stock, restricted stock units and stock appreciation rights to our employees, officers, and directors, up to a maximum of 29.5  million shares, plus any shares authorized for grant or subject to awards under the 2000 Equity Plan that are not delivered to participants for any reason. Pursuant to the 2019 Equity Plan, incentive stock options may be granted to employees and officers and non-qualified options may be granted to employees, officers, and directors, at not less than 100 percent of the fair market value on the date of grant.
Approximately 6.9 million restricted stock units or options were available for grant under our 2019 Equity Plan as of March 31, 2026.
Stock Options
Options granted under the 2019 Equity Plan and the 2000 Equity Plan generally expire ten years from the date of grant. All outstanding options were fully vested and exercisable as of March 31, 2026.
The following table summarizes our stock option activity for the fiscal year ended March 31, 2026:

Options
(in thousands) Weighted-
Average
Exercise Prices Weighted-
Average
Remaining
Contractual
Term  (in years) Aggregate
Intrinsic Value
(in millions)
Outstanding as of March 31, 2025
6   $ 63.51  

Granted 2   164.39  
Exercised ( 5 ) 98.74  
Forfeited, cancelled or expired —   —  
Outstanding as of March 31, 2026
3   $ 57.19   2.00 $ 0.4  
Vested 3   $ 57.19   2.00 $ 0.4  
Exercisable as of March 31, 2026
3   $ 57.19   2.00 $ 0.4  

The aggregate intrinsic value represents the total pre-tax intrinsic value based on our closing stock price as of March 31, 2026, which would have been received by the option holders had all the option holders exercised their options as of that date. The total intrinsic values of stock options exercised during fiscal years 2026, 2025, and 2024 were $ 0.3 million, $ 0.4 million, and $ 10 million, respectively. We issue new common stock from our authorized shares upon the exercise of stock options.
Restricted Stock Units
We grant restricted stock units under our 2019 Equity Plan to employees worldwide. Restricted stock units are unfunded, unsecured rights to receive common stock upon the satisfaction of certain vesting criteria. Upon vesting, a number of shares of common stock equivalent to the number of restricted stock units are typically issued net of required tax withholding requirements, if any. Restricted stock units are subject to forfeiture and transfer restrictions. Vesting for restricted stock units is based on the holders’ continued employment with us through each applicable vest date. If the vesting conditions are not met, unvested restricted stock units will be forfeited. Our restricted stock units generally vest over 35 months to four years .
70

Table of Contents

The following table summarizes our restricted stock units activity, excluding performance-based and market-based restricted stock unit activity which is discussed below, for the fiscal year ended March 31, 2026:

Restricted
Stock Units
(in thousands) Weighted-
Average Grant
Date Fair Values
Outstanding as of March 31, 2025
7,549   $ 133.90  

Granted 3,864   154.23  
Vested ( 4,339 ) 133.74  
Forfeited or cancelled ( 633 ) 139.84  
Outstanding as of March 31, 2026
6,441   $ 145.62  

The grant date fair value of restricted stock units is based on the quoted market price of our common stock on the date of grant. The weighted-average grant date fair values of restricted stock units granted during fiscal years 2026, 2025, and 2024 were $ 154.23 , $ 138.59 , and $ 129.30 , respectively. The fair values of restricted stock units that vested during fiscal years 2026, 2025, and 2024 were $ 738 million, $ 633 million, and $ 519 million, respectively.
Performance-Based Restricted Stock Units
Our performance-based restricted stock units vest upon the achievement of pre-determined performance-based milestones, including, but not limited to, management reporting milestones of net bookings and operating income metrics, as well as service conditions. If these performance-based milestones are not met but service conditions are met, the performance-based restricted stock units will not vest, in which case any compensation expense we have recognized to date will be reversed. Generally, the measurement periods of our performance-based restricted stock units are 3 years, with awards vesting after each annual measurement period or cliff-vesting after the completion of the total aggregate measurement period.

Each quarter, we update our assessment of the probability that the performance milestones will be achieved. We amortize the fair values of performance-based restricted stock units over the requisite service period. The performance-based restricted stock units contain threshold, target and maximum milestones for each performance-based milestone. The number of shares of common stock to be issued at vesting will range from zero to 200 percent of the target number of performance-based restricted stock units attributable to each performance-based milestone based on the company’s performance as compared to these threshold, target and maximum performance-based milestones. Each performance-based milestone is weighted evenly and the number of shares that vest based on each performance-based milestone is independent from the other.

The following table summarizes our performance-based restricted stock unit activity, presented with the maximum number of shares that could potentially vest, for the fiscal year ended March 31, 2026:

Performance-
Based Restricted
Stock Units
(in thousands) Weighted-
Average Grant
Date Fair Value
Outstanding as of March 31, 2025
1,004   $ 134.60  
Granted 813   151.10  
Vested ( 266 ) 150.23  
Forfeited or cancelled ( 493 ) 138.10  
Outstanding as of March 31, 2026
1,058   $ 141.72  

The weighted-average grant date fair values of performance-based restricted stock units granted during fiscal years 2026, 2025, and 2024 were $ 151.10 , $ 137.53 , and $ 128.66 respectively. The fair values of performance-based restricted stock units that vested during fiscal years 2026, 2025, and 2024 were $ 40 million, $ 35 million, and $ 11 million respectively.
71

Table of Contents

Market-Based Restricted Stock Units
Our market-based restricted stock units vest contingent upon the achievement of pre-determined market and service conditions. If these market conditions are not met but service conditions are met, the market-based restricted stock units will not vest; however, any compensation expense we have recognized to date will not be reversed. The number of shares of common stock to be issued at vesting for these awards are based on our total stockholder return (“TSR”) relative to the performance of either companies in the Nasdaq-100 (for awards granted in fiscal years 2023 and 2024) or the S&P 500 Index (for awards granted in fiscal year 2025 and going forward) (“Relative TSR”) and on absolute TSR performance measured against pre-established goals, which started in fiscal year 2025 (“Absolute TSR”), each over a three-year period. Payout with respect to the Relative TSR component ranges from zero to 200 percent of the target number of Relative TSR units granted, and payout with respect to the Absolute TSR component ranges from zero to 75 percent of the target number of the underlying base award (which is comprised of Performance-Based Restricted Stock Units and Relative TSR units). These awards cliff-vest after the completion of the three-year measurement period, contingent on the achievement of both market and service conditions.
We amortize the fair values of market-based restricted stock units over the requisite service period.
The following table summarizes our market-based restricted stock unit activity, presented with the maximum number of shares that could potentially vest, for the year ended March 31, 2026 :
Market-Based
Restricted  Stock
Units
(in thousands) Weighted-
Average  Grant
Date Fair Value
Outstanding as of March 31, 2025
637   $ 115.43  
Granted 367   103.73  
Vested ( 34 ) 150.48  
Forfeited or cancelled ( 80 ) 176.70  
Outstanding as of March 31, 2026
890   $ 103.80  

The weighted-average grant date fair values of market-based restricted stock units granted during fiscal years 2026, 2025, and 2024 were $ 103.73 , $ 80.91 , and $ 152.92 , respectively. The fair values of market-based restricted stock units that vested during fiscal years 2026, 2025, and 2024 were $ 5 million, $ 3 million, and $ 4 million, respectively.
ESPP
Pursuant to our ESPP, eligible employees were permitted to authorize payroll deductions of between 2 percent and 10 percent of their compensation to purchase shares of common stock at 85 percent of the lower of the market price of our common stock on the date of commencement of the applicable offering period or on the last day of each six-month purchase period.
The final purchase under the ESPP occurred during the fourth quarter of fiscal year 2026. In connection with the Merger, no offering period commenced following the February 2026 purchase.
The following table summarizes our ESPP activity for fiscal years ended March 31, 2026, 2025, and 2024:

Shares Issued
(in millions) Exercise Prices for Purchase Rights Weighted-Average Fair Values of Purchase Rights
Fiscal Year 2024
0.8   $ 94.96 - $ 102.58
$ 30.82  
Fiscal Year 2025
0.7   $ 102.58 - $ 120.94
$ 34.07  
Fiscal Year 2026
0.8   $ 109.10 - $ 143.79
$ 32.74  

The fair values were estimated on the date of grant using the Black-Scholes valuation model. Shares issued under the ESPP were issued from the plan’s authorized share pool.
72

Table of Contents

Stock-Based Compensation Expense
The following table summarizes stock-based compensation expense resulting from stock options, restricted stock units, market-based restricted stock units, performance-based restricted stock units, and the ESPP purchase rights included in our Consolidated Statements of Operations (in millions):
  Year Ended March 31,
  2026 2025 2024
Cost of revenue $ 11   $ 14   $ 8  
Research and development 467   457   418  
Marketing and sales 57   56   52  
General and administrative 121   115   106  
Stock-based compensation expense $ 656   $ 642   $ 584  

During the fiscal years ended March 31, 2026, 2025, and 2024, we recognized $ 85 million, $ 85 million, and $ 79 million, respectively, of deferred income tax benefit related to our stock-based compensation expense.
As of March 31, 2026, our total unrecognized compensation cost related to stock options, restricted stock units, market-based restricted stock units, and performance-based restricted stock units was $ 722 million and is expected to be recognized over a weighted-average service period of 1.7 years. Of the $ 722 million of unrecognized compensation cost, $ 682 million relates to restricted stock units, $ 21 million relates to market-based restricted stock units, and $ 19 million relates to performance-based restricted stock units.
Deferred Compensation Plan
We have a Deferred Compensation Plan (“DCP”) for the benefit of a select group of management or highly compensated employees and directors, which is unfunded and intended to be a plan that is not qualified within the meaning of section 401(a) of the Internal Revenue Code. The DCP permits the deferral of the annual base salary and/or director cash compensation up to a maximum amount. The deferrals are held in a separate trust, which has been established by us to administer the DCP. The trust is a grantor trust and the specific terms of the trust agreement provide that the assets of the trust are available to satisfy the claims of general creditors in the event of our insolvency. The assets held by the trust are classified as trading securities and are held at fair value on our Consolidated Balance Sheets. The assets and liabilities of the DCP are presented in other assets and other liabilities on our Consolidated Balance Sheets, respectively, with changes in the fair value of the assets and in the deferred compensation liability recognized as compensation expense. The estimated fair value of the assets was $ 46 million and $ 36 million as of March 31, 2026 and 2025, respectively. As of March 31, 2026 and 2025, $ 46 million and $ 36 million were recorded, respectively, to recognize undistributed deferred compensation due to employees.
401(k) Plan, Registered Retirement Savings Plan and ITP Plan
We have a 401(k) plan covering substantially all of our U.S. employees, a Registered Retirement Savings Plan covering substantially all of our Canadian employees, and an ITP pension plan covering substantially all our Swedish employees. These plans may permit us to make discretionary contributions to employees’ accounts based on our financial performance. We contributed an aggregate of $ 47 million, $ 35 million, and $ 39 million to these plans in fiscal years 2026, 2025, and 2024, respectively.
Stock Repurchase Program
In August 2022, our Board of Directors authorized a program to repurchase up to $ 2.6  billion of our common stock. This program was terminated on May 8, 2024.
73

Table of Contents

In May 2024, the Company’s Audit Committee, upon delegation from the Company’s Board of Directors, authorized a program to repurchase up to $ 5.0  billion of our common stock. This program superseded and replaced the August 2022 program and expires on May 9, 2027. Under this program, we may purchase stock in the open market or through privately negotiated transactions in accordance with applicable securities laws, including pursuant to pre-arranged stock trading plans. The timing and actual amount of the stock repurchases will depend on several factors including price, capital availability, regulatory requirements, alternative investment opportunities and other market conditions. We are not obligated to repurchase a specific number of shares of our common stock under this program and it may be modified, suspended or discontinued at any time. During the second quarter of fiscal year 2026, we suspended repurchase activity under this program in contemplation of the Merger detailed in Note 1 — Description of Business and Basis of Presentation .
The following table summarizes total shares repurchased during fiscal years 2026, 2025, and 2024:

August 2022 Program May 2024 Program Total
(In millions) Shares Amount (a)
Shares Amount (a)
Shares Amount
Fiscal Year 2024
10.0   $ 1,300   —   $ —   10.0   $ 1,300  
Fiscal Year 2025
1.2   $ 152   16.4   2,348   17.6   $ 2,500  
Fiscal Year 2026
—   $ —   5.3   $ 750   5.3   $ 750  
(a) Amount excludes excise taxes. Accrued excise taxes are included in accounts payable, accrued, and other current liabilities and additional paid-in capital on the Consolidated Balance Sheets.

74

Table of Contents

(15)  INTEREST AND OTHER INCOME (EXPENSE), NET
Interest and other income (expense), net, for the fiscal years ended March 31, 2026, 2025, and 2024 consisted of (in millions):

  Year Ended March 31,
  2026 2025 2024
Interest expense $ ( 53 ) $ ( 58 ) $ ( 58 )
Interest income 70   125   126  
Net gain (loss) on foreign currency transactions 13   ( 29 ) ( 10 )
Net gain (loss) on foreign currency forward contracts ( 10 ) 45   12  
Other income (expense), net ( 2 ) 2   1  
Interest and other income (expense), net $ 18   $ 85   $ 71  

75

Table of Contents

(16)  EARNINGS PER SHARE
The following table summarizes the computations of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic EPS is computed as net income divided by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock-based compensation plans including stock options, restricted stock units, market-based restricted stock units, performance-based restricted stock units, and ESPP purchase rights using the treasury stock method.
  Year Ended March 31,
(In millions, except per share amounts) 2026 2025 2024
Net income $ 887   $ 1,121   $ 1,273  
Shares used to compute earnings per share:
Weighted-average common stock outstanding — basic 250   262   270  
Dilutive potential common shares related to stock award plans 3   2   2  

Weighted-average common stock outstanding — diluted 253   264   272  
Earnings per share:
Basic $ 3.55   $ 4.28   $ 4.71  
Diluted $ 3.51   $ 4.25   $ 4.68  

Certain restricted stock units, market-based restricted stock units and performance-based restricted stock units were excluded from the treasury stock method computation of diluted shares as their inclusion would have had an antidilutive effect. For the fiscal years ended March 31, 2026, 2025 and 2024, one million such shares were excluded.
76

Table of Contents

(17)  SEGMENT AND REVENUE INFORMATION
Our reporting segment is based upon: our internal organizational structure; the manner in which our operations are managed; the criteria used by our Chief Executive Officer, our Chief Operating Decision Maker (“CODM”), to evaluate segment performance; the availability of separate financial information; and overall materiality considerations. As of March 31, 2026, we have one reportable segment, which represents our only operating segment. Our CODM makes decisions on resource allocation and assesses performance of the business based on our consolidated results, including net income.
The measure of segment assets are reported on the Consolidated Balance Sheets as total assets.

Information about our single reportable segment net revenue, net income, and significant segment expenses for the fiscal years ended March 31, 2026, 2025, and 2024 is presented below (in millions):

Year Ended March 31,
2026 2025 2024
Net revenue $ 7,531   $ 7,463   $ 7,562  
Less:
Cost of revenue (1)
1,536   1,489   1,626  
Research and development (1)
2,361   2,112   2,002  
Marketing and sales (1)
1,071   906   967  
General and administrative (1)
614   625   583  
Acquisition-related expenses (2)
131   107   218  
Restructuring and related charges —   62   64  
Stock-based compensation 656   642   584  
Interest and other (income) expenses, net ( 18 ) ( 85 ) ( 71 )
Provision for income taxes 293   484   316  
Net income $ 887   $ 1,121   $ 1,273  
(1) Excludes amounts related to acquisition-related expenses, restructuring and related charges, and stock-based compensation, which are presented separately in the table above.
(2) Includes (i) amortization and impairment of intangibles, and (ii) fees and other direct expenses related to the Merger described in Note 1 , which are recorded within General and administrative expenses in the Consolidated Statements of Operations.

Information about our total net revenue by timing of recognition for the fiscal years ended March 31, 2026, 2025, and 2024 is presented below (in millions):
Year Ended March 31,
2026 2025 2024
Net revenue by timing of recognition
Revenue recognized at a point in time $ 2,473   $ 2,665   $ 2,563  
Revenue recognized over time 5,058   4,798   4,999  
Net revenue $ 7,531   $ 7,463   $ 7,562  

Generally, performance obligations that are recognized upfront upon transfer of control are classified as revenue recognized at a point in time, while performance obligations that are recognized over either the Estimated Offering Period, contractual term or subscription period as the services are provided are classified as revenue recognized over time.
Revenue recognized at a point in time includes revenue allocated to the software license performance obligation. This also includes a portion of revenue from the licensing of software to third-parties.
Revenue recognized over time includes service revenue allocated to the future update rights and the online hosting performance obligations. This also includes sales of extra content associated with our online-hosted services such as our Ultimate Team game mode, revenue allocated to the future update rights from licensing of software to third-parties, subscription services, and revenue recognized from third parties that publish games and services under a license to certain of our intellectual property assets.
77

Table of Contents

Information about our total net revenue by composition for the fiscal years ended March 31, 2026, 2025, and 2024 is presented below (in millions):
  Year Ended March 31,
  2026 2025 2024
Net revenue by composition
Full game downloads $ 1,708   $ 1,478   $ 1,343  
Packaged goods 440   524   672  
Full game 2,148   2,002   2,015  

Live services and other
5,383   5,461   5,547  
Net revenue $ 7,531   $ 7,463   $ 7,562  

Full game net revenue includes full game downloads and packaged goods. Full game downloads primarily include revenue from digital sales of full games on console, PC, and certain licensing revenue. Packaged goods primarily include revenue from full games that are sold physically through distribution arrangements, mass market retailers, and specialty stores.
Live services and other net revenue primarily includes revenue from sales of extra content for console, PC, and mobile games, certain licensing revenue, subscriptions, and advertising.
Information about our total net revenue by platform for the fiscal years ended March 31, 2026, 2025, and 2024 is presented below (in millions):
Year Ended March 31,
  2026 2025 2024
Platform net revenue
Console $ 4,694   $ 4,776   $ 4,632  
PC and other 1,746   1,547   1,717  
Mobile 1,091   1,140   1,213  
Net revenue $ 7,531   $ 7,463   $ 7,562  

Information about our operations in North America and internationally for the fiscal years ended March 31, 2026, 2025, and 2024 is presented below (in millions):
  Year Ended March 31,
  2026 2025 2024
Net revenue from unaffiliated customers
North America $ 3,034   $ 3,078   $ 3,001  
International 4,497   4,385   4,561  
Net revenue $ 7,531   $ 7,463   $ 7,562  

  As of March 31,
  2026 2025
Long-lived assets
North America $ 463   $ 438  
International 150   148  
Total $ 613   $ 586  

We attribute net revenue from external customers to individual countries based on the location of the legal entity that sells the products and/or services. Note that revenue attributed to the legal entity that makes the sale is often not the country where the consumer resides. For example, revenue generated by our Swiss legal entity includes digital revenue from consumers who reside outside of Switzerland, including consumers who reside outside of Europe. Revenue generated by our Swiss legal entity during fiscal years 2026, 2025, and 2024 represents $ 4,407 million, $ 4,279 million and $ 4,374 million or 59 percent, 57 percent and 58 percent of our total net revenue, respectively. Revenue generated in the United States represents over 99 percent of our total North America net revenue. There were no other countries with net revenue greater than 10 percent.
78

Table of Contents

In fiscal year 2026, our direct sales to Sony and Microsoft represented approximately 39 percent and 16 percent of total net revenue, respectively. In fiscal year 2025, our direct sales to Sony and Microsoft represented approximately 39 percent and 17 percent of total net revenue, respectively. In fiscal year 2024, our direct sales to Sony and Microsoft represented approximately 37 percent and 16 percent of total net revenue, respectively.
79

Table of Contents

Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Electronic Arts Inc.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Electronic Arts Inc. and subsidiaries (the Company) as of March 28, 2026 and March 29, 2025, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended March 28, 2026, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of March 28, 2026, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 28, 2026 and March 29, 2025, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended March 28, 2026, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 28, 2026 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
80

Table of Contents

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of the estimated offering period
As discussed in Note 2 to the consolidated financial statements, revenue for transactions that include future update rights and/or online hosting performance obligations are subject to deferral and recognized over the Estimated Offering Period. Determining the Estimated Offering Period is inherently subjective because it is not an explicitly defined period. The Company’s determination of the Estimated Offering Period considers the following factors:
• the average period of time customers are online
• for physical games sold at retail, the period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the customer
• known and expected online gameplay trends
• disclosed service periods for competitors’ games.
The Company reported net revenue of $7,531 million for the year-ended March 28, 2026 and deferred net revenue of $2,415 million as of March 28, 2026.
We identified the assessment of the Estimated Offering Period as a critical audit matter. A high degree of audit effort and subjective and complex auditor judgment was required to evaluate the sufficiency of audit evidence obtained over the Estimated Offering Period, including whether historical experience and other qualitative factors, such as those described above, are indicative of the time period during which the Company’s games and extra content are played by its customers.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to determine the Estimated Offering Period, including controls over the factors noted above and the Company’s review of the Estimated Offering Period concluded for use in recognizing revenue. We evaluated the model the Company used to develop the Estimated Offering Period against the accounting requirements and for potential management bias. We computed the average period of time customers are online as well as the period of time between the date a game unit is sold to a reseller and the date the reseller sells the game unit to the customer by using the Company’s internal data. We compared the results of these computations against the periods used by the Company in its Estimated Offering Period model. We obtained disclosed service periods for competitors’ games and compared them against the data used by the Company. We compared known and expected online gameplay trends used in the determination of the Estimated Offering Period to historical Company information and publicly available industry information. We performed a sensitivity analysis over the Company’s Estimated Offering Period to assess the impact of potential changes in the Estimated Offering Period on revenue. We assessed the sufficiency of evidence obtained related to the Estimated Offering Period by evaluating the results of the procedures performed.
/s/ KPMG LLP
We have served as the Company’s auditor since 1987.
Santa Clara, California
May 11, 2026

81

Table of Contents

Item 9:      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.

Item 9A:      Controls and Procedures
Definition and Limitations of Disclosure Controls
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluates these controls and procedures on an ongoing basis.
There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. These limitations include the possibility of human error, the circumvention or overriding of the controls and procedures and reasonable resource constraints. In addition, because we have designed our system of controls based on certain assumptions, which we believe are reasonable, about the likelihood of future events, our system of controls may not achieve its desired purpose under all possible future conditions. Accordingly, our disclosure controls and procedures provide reasonable assurance, but not absolute assurance, of achieving their objectives.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures, believe that as of the end of the period covered by this report, our disclosure controls and procedures were effective in providing the requisite reasonable assurance that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Our internal control over financial reporting is designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. There are inherent limitations to the effectiveness of any system of internal control over financial reporting. These limitations include the possibility of human error, the circumvention or overriding of the system and reasonable resource constraints. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with our policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of the end of our most recently completed fiscal year. In making its assessment, management used the criteria set forth in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, our management has concluded that, as of the end of our most recently completed fiscal year, our internal control over financial reporting was effective and provided a reasonable level of assurance.
KPMG LLP, our independent registered public accounting firm, has issued an auditors’ report on the effectiveness of our internal control over financial reporting. That report appears on Page 80 .
Changes in Internal Control over Financial Reporting
There has been no change in our internal controls over financial reporting identified in connection with our evaluation that occurred during the fiscal quarter ended March 31, 2026 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
82

Table of Contents

Item 9B:      Other Information
Rule 10b5-1 Plans

During the three months ended March 31, 2026, none of our directors or executive officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement, ” as defined in Item 408 of Regulation S-K.

Item 9C:      Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.
83

Table of Contents

PART III

Item 10:      Directors, Executive Officers and Corporate Governance
The information required by Item 10, other than the information regarding executive officers, which is included in Part I, Item 1 of this report, is incorporated herein by reference to the information to be included in our 2026 Proxy under the headings “Proxy Highlights”, “Board of Directors and Corporate Governance,” “ Insider Trading , Anti-Hedging and Anti-Pledging Policies” and, as applicable, “Delinquent Section 16(a) Reports.”

Item 11:      Executive Compensation
The information required by Item 11 is incorporated herein by reference to the information to be included in the 2026 Proxy under the headings “Director Compensation”, “Compensation Discussion & Analysis” and “Compensation Committee Interlocks and Insider Participation.”

Item 12:      Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 12 is incorporated herein by reference to the information to be included in the 2026 Proxy under the headings “Executive Compensation Tables” and “Security Ownership of Certain Beneficial Owners and Management.”

Item 13:      Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 is incorporated herein by reference to the information to be included in the 2026 Proxy under the headings “Director Independence”, “Related Persons Transaction Policy”, and, as applicable, “Related Person Transactions.”

Item 14:      Principal Accountant Fees and Services
The information required by Item 14 is incorporated herein by reference to the information to be included in Proposal 3 of the 2026 Proxy and under the heading “Audit Matters.”

PART IV

Item 15:      Exhibits and Financial Statements
(a) Documents filed as part of this report
1.   Financial Statements: See Index to Consolidated Financial Statements under Item 8 on Page 34 of this report.
2.   Financial Statement Schedules: The Financial Statement Schedules have been omitted because they are not applicable or are not required or are not present in material amounts or the information required to be set forth herein is included in the Consolidated Financial Statements or Notes thereto.
3.   Exhibits: The exhibits listed in the accompanying index to exhibits on Page 85 are filed or incorporated by reference as part of this report.

Item 16:      Form 10-K Summary
None.

84

Table of Contents

ELECTRONIC ARTS INC.
2026 FORM 10-K ANNUAL REPORT
EXHIBIT INDEX
        
Incorporated by Reference    Filed
Herewith
Number    Exhibit Title Form    File No.    Filing Date   

2.01
Agreement and Plan of Merger, by and among Electronic Arts Inc., Oak-Eagle AcquireCo, Inc. and Oak-Eagle MergerCo, Inc., dated as of September 28, 2025
8-K 000-17948 9/29/2025

3.01
Amended and Restated Certificate of Incorporation
8-K 000-17948 8/13/2021   

3.02
Certificate of Amendment to Amended and Restated Certificate of Incorporation
8-K 000-17948 8/15/2022

3.03
Amended and Restated Bylaws
8-K 000-17948 8/15/2022   

4.01
Specimen Certificate of Registrant’s Common Stock
10-Q 000-17948 2/6/2018   

4.02
Description of Securities
10-K 000-17948 5/22/2024

4.03
Indenture, dated as of February 24, 2016 by and between Electronic Arts Inc. and U.S. Bank National Association, as Trustee
8-K 000-17948 2/24/2016

4.05
Second Supplemental Indenture, dated as of February 11, 2021, between Electronic Arts Inc. and U.S. Bank National Association, as Trustee
8-K 000-17948 2/11/2021

10.01*
Form of Indemnity Agreement with Directors
10-K 000-17948 6/4/2004   

10.02*
Electronic Arts Inc. Executive Bonus Plan
10-Q 000-17948 8/2/2024   

10.03*
Electronic Arts Inc. Amended and Restated Change in Control Severance Plan
8-K
000-17948
8/15/2025

10.04*
Electronic Arts Inc. Deferred Compensation Plan
10-K 000-17948 5/22/2024   

10.05*
EA Bonus Plan
8-K 000-17948 5/18/2018

10.06*
Form of Performance-Based Restricted Stock Unit Agreement
10-K 000-17948 5/24/2023

10.07*
Form of Performance-Based Restricted Stock Unit Agreement
8-K
000-17948
5/16/2024

10.08*
2000 Equity Incentive Plan, as amended, and related documents
8-K 000-17948 8/1/2016

10.09*
2000 Employee Stock Purchase Plan, as amended
10-Q 000-17948 2/8/2022

10.10*
Form of Restricted Stock Unit Agreement
10-K
000-17948
5/22/2024

10.11*
Form of Restricted Stock Unit Agreement For Non-Employee Directors
10-K
000-17948
5/24/2023

10.12*
Amended and Restated 2019 Equity Incentive Plan
8-K 000-17948 8/5/2024

10.13*
Electronic Arts Inc. Executive Officer Cash Severance Policy
8-K 000-17948 9/1/2022

10.14*
Offer Letter for Employment at Electronic Arts Inc. to Andrew Wilson, dated September 15, 2013
8-K 000-17948 9/17/2013

10.15*
Offer Letter for Employment at Electronic Arts Inc. to Stuart Canfield, dated June 19, 2023
8-K
000-17948 6/20/2023

10.16*
Offer Letter for Employment at Electronic Arts Inc. to Mala Singh, dated August 27, 2016
10-Q 000-17948 11/8/2016

85

Table of Contents

        
Incorporated by Reference    Filed
Herewith
Number    Exhibit Title Form    File No.    Filing Date   
10.17**
Durango Publisher License Agreement, dated June 29, 2012, by and among Electronic Arts Inc., EA International (Studio & Publishing) Ltd., Microsoft Licensing, GP and Microsoft Corporation
10-K 000-17948 5/21/2014

10.18**
Xbox Console Publisher License Agreement, dated as of September 30, 2020, between Microsoft Corporation, Electronic Arts Inc. and EA Swiss Sàrl
10-Q 000-17948 11/10/2020

10.19**
Addendum to Xbox Console Publisher License Agreement, effective as of July 1, 2024, between Microsoft Corporation, Electronic Arts Inc. and EA Swiss Sàrl
10-Q
000-17948
8/2/2024

10.20**
Playstation Global Developer & Publisher Agreement, dated April 1, 2018, by and among Electronic Arts Inc., EA International (Studio & Publishing) Ltd., Sony Interactive Entertainment Inc., Sony Interactive Entertainment LLC, and Sony Interactive Entertainment Europe Ltd
10-Q 000-17948 8/8/2018

10.21**
PlayStation 5 Amendment to the PlayStation Global Developer and Publisher Agreement, dated as of October 15, 2020, by and among Electronic Arts Inc., EA Swiss Sàrl, Sony Interactive Entertainment, Inc., Sony Interactive Entertainment LLC, and Sony Interactive Entertainment Europe Limited
10-Q 000-17948 11/10/2020

10.22
Credit Agreement, dated March 22, 2023, by and among Electronic Arts Inc., the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent
8-K 000-17948 3/22/2023

10.23
Voting, Support and Rollover Agreement, by and among Electronic Arts Inc., Oak-Eagle AcquireCo, Inc. and the Public Investment Fund, dated as of September 28, 2025
8-K 000-17948 9/29/2025

10.24
Form of Voting and Support Agreement, by and between Electronic Arts Inc. and certain stockholders of Electronic Arts Inc., dated as of September 28, 2025
8-K 000-17948 9/29/2025

19.1
Electronic Arts Inc. Insider Trading Policy
10-K
000-17948
5/22/2024

21.1
Subsidiaries of the Registrant
X

23.1
Consent of KPMG LLP, Independent Registered Public Accounting Firm
X

31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X

31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X

Additional exhibits furnished with this report:

32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X

32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X

97
Electronic Arts Inc. Clawback Policy
10-K
000-17948
5/22/2024

101.INS †
Inline XBRL Instance Document X

101.SCH †
Inline XBRL Taxonomy Extension Schema Document X

101.CAL †
Inline XBRL Taxonomy Extension Calculation Linkbase Document X

86

Table of Contents

        
Incorporated by Reference    Filed
Herewith
Number    Exhibit Title Form    File No.    Filing Date   

101.DEF †
Inline XBRL Taxonomy Extension Definition Linkbase Document X

101.LAB †
Inline XBRL Taxonomy Extension Label Linkbase Document X

101.PRE †
Inline XBRL Taxonomy Extension Presentation Linkbase Document X
104 The Cover Page Interactive Data File, formatted in Inline XBRL (included in Exhibit 101)

* Management contract or compensatory plan or arrangement.
** Confidential portions of these documents have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

87

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ELECTRONIC ARTS INC.
By: /s/    Andrew Wilson
Andrew Wilson
Chief Executive Officer
Date: May 11, 2026

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated and on the 11 th of May, 2026.

Name   Title

/s/    Andrew Wilson   Chief Executive Officer
Andrew Wilson  

/s/ Stuart Canfield   Executive Vice President and
Stuart Canfield Chief Financial Officer

/s/    Eric Kelly Senior Vice President and
Eric Kelly Chief Accounting Officer

Directors:  
/s/    Andrew Wilson   Chair of the Board
Andrew Wilson  

/s/    Kofi A. Bruce
Director
Kofi A. Bruce

/s/    Rachel A. Gonzalez
  Director
Rachel A. Gonzalez
 

/s/    Jeffrey T. Huber   Director
Jeffrey T. Huber  

/s/    Talbott Roche Director
Talbott Roche

/s/    Richard A. Simonson   Director
Richard A. Simonson  

/s/    Luis A. Ubiñas   Director
Luis A. Ubiñas  

/s/ Heidi Ueberroth Director
Heidi Ueberroth

88